INCOME TAXES

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE 8 - INCOME TAXES

Income taxes recorded in our consolidated statements of income consists of the following:

	2021		2020
Taxes currently payable
Federal	$	560,808	$	1,610,924
State		1,199,569		1,229,752
Deferred Income Taxes		1,971,596		1,220,637
Total Income Tax Expense	$	3,731,973	$	4,061,313

We account for income taxes in accordance with GAAP, which requires an asset and liability approach to financial accounting and reporting for income taxes. As required by GAAP, we recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. 

As of December 31, 2021 and 2020 we had $38,673 and $44,155 of unrecognized tax benefits that if recognized would affect the tax rate. We do not expect the total amount of unrecognized tax benefits to materially change over the next 12 months.

A reconciliation of the beginning and ending amount of total unrecognized benefits for the years ended December 31, 2021 and 2020 are as follows:

	2021		2020
Balance, beginning of year	$	44,155	$	-
Increases related to prior year tax positions		-		44,155
Decreases related to prior year tax positions		(5,482)		-
Increases related to current year tax positions		-		-
Settlements		-		-
Balance, end of year	$	38,673	$	44,155

We are primarily subject to United States, Minnesota, Iowa, Nebraska, North Dakota and Wisconsin income taxes. Tax years subsequent to 2017 remain open to examination by federal and state tax authorities. We are currently undergoing an examination by the State of Minnesota.  We do not expect the results of the examination to have a material effect on our ongoing financial statements. Our policy is to recognize interest and penalties related to income tax matters as income tax expense. As of December 31, 2021 and 2020 we had $4,102 and $3,208 accrued interest that related to income tax matters.

The differences between the statutory federal tax rate and the effective tax rate were as follows:

	2021		2020
Statutory Tax Rate	21.00	%	21.00	%
Effect of:
State Income Taxes Net of Federal Tax Benefit	6.72		8.79
Forgiveness of PPP Loan	(3.83)		-
Permanent Differences and Other, Net	(0.54)		(0.57)
Effective tax rate	23.35	%	29.22	%

Our effective income tax rate for the year ended December 31, 2021 was lower than the effective income tax rate for the year ended December 31, 2020 primarily due to the PPP loan forgiveness not being taxable at the federal and state level.

Deferred income taxes and unrecognized tax benefits reflected in our consolidated balance sheets are summarized as follows:

	2021		2020
Deferred Tax Assets
Accrued Expenses	$	(415,464)	$	(465,304)
Deferred Compensation		(131,412)		(263,355)
Other		(122,939)		(131,291)
Unrealized Loss on SWAP		(252,112)		(776,730)
State NOL		-		(52,854)
Leases		(321,530)		(353,043)
Total Deferred Tax Assets		(1,243,457)		(2,042,577)
Deferred Tax Liabilities
Fixed Assets		14,921,908		12,306,391
Intangible Assets		4,124,935		5,049,532
Investments		1,180,314		1,208,856
Contract Assets		189,089		120,331
Leases		311,711		345,876
Total Deferred Tax Liabilities:		20,727,957		19,030,986
Total Net Deferred Taxes	$	19,484,500	$	16,988,409