Income Taxes

12 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

13. Income Taxes

The following are the components of income taxes (benefit) (in thousands):

Fiscal years ended June 30,	2021			2020
Current
Federal	$	(186	)	$	489
State		97			262
		(89	)		751
Deferred
Federal		1,402			(37	)
State		191			(141	)
		1,593			(178	)
	$	1,504		$	573

58

EVI Industries, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

 

The reconciliation of income tax expense computed at the federal statutory tax rate of 21% for the fiscal years ended June 30, 2021 and 2020 to the provision for income taxes is as follows (in thousands):

Fiscal years ended June 30,	2021			2020
Tax at the statutory rate	$	2,076		$	283
State income taxes, net of federal benefit		265			67
Nondeductible compensation		348			340
PPP Loan forgiveness		(1,462	)		-
Other		277			(117	)
	$	1,504		$	573
Effective tax rate		15.2	%		42.5	%

Deferred income taxes reflect the net tax effect of temporary differences between the basis of assets and liabilities for financial reporting purposes and the basis used for income tax purposes. Significant components of the Company’s current and noncurrent deferred tax assets and liabilities as of June 30, 2021 and 2020 were as follows (in thousands):

Fiscal years ended June 30,	2021			2020
Deferred tax assets:
Allowance for doubtful accounts	$	182		$	106
Inventory capitalization		353			385
Stock compensation		557			705
Accrued liabilities		605			221
Other		69			554
		1,766			1,971
Deferred tax liabilities:
Goodwill		(2,974	)		(2,120	)
Depreciation		(1,533	)		(412	)
Intangible assets		(1,268	)		(1,167	)
Other		(199	)		-
		(5,974	)		(3,699	)
Net deferred income tax (liabilities) assets	$	(4,208	)	$	(1,728	)

As of June 30, 2021, the Company was subject to potential federal and state tax examinations for the tax years including and subsequent to 2016.