Note 6 - Income Taxes

6 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

6. Income Taxes

During the

six

-month period ended

September 30, 2018,

the Company recorded

$6,000

in income tax benefit at an effective rate of -

0.3%.

The Company records income taxes using an estimated annual effective tax rate for interim reporting. The primary factors contributing to the difference between the federal statutory rate of

21%

and the Company’s effective tax rate for the

six

-month period ended

September 30, 2018

were the estimated benefit for the exclusion of income for the Company’s captive insurance company subsidiary under Section

831

(b), the presentation of the non-taxable bargain purchase gain, the change in the valuation allowance, and the pretax activity of Contrail Aviation Support, LLC. During the

six

-month period ended

September 30, 2017,

the Company recorded

$655,000

in income tax expense which resulted in an effective tax rate of

27.7%.

The primary factors contributing to the difference between the federal statutory rate and the Company’s effective tax rate for the

six

-month period ended

September 30, 2017

were the change in valuation allowance against Delphax’s pretax activity in the period, the benefit for the federal domestic production activities deduction, the increase in the valuation allowance related to the Insignia unrealized impairment loss, state income tax expense, and the estimated benefit for the exclusion of income for the Company’s captive insurance company subsidiary afforded under Section

831

(b).