INCOME TAXES

12 Months Ended

Dec. 31, 2023

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:

	2023		2022
Taxes currently payable
Federal	$	-	$	(50,330)
State		1,795,530		380,082
Deferred Income Taxes		520,126		2,368,911
Total Income Tax Expense	$	2,315,656	$	2,698,663

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, 2022, we had $19,787 of unrecognized tax benefits that if recognized would affect the tax rate. As of December 31, 2023, the uncertain tax position was reduced to $0 due to a lapse in stature of limitations for the year the position originated.

A reconciliation of the beginning and ending amount of total unrecognized benefits for the years ended December 31, 2023, and 2022 are as follows:

	2023		2022
Balance, beginning of year	$	19,787	$	38,673
Increases related to prior year tax positions		-		-
Decreases related to prior year tax positions		-		(18,886)
Increases related to current year tax positions		-		-
Decreases due to lapse of statute of limitations		(19,787)		-
Settlements		-		-
Balance, end of year	$	-	$	19,787

We are primarily subject to United States, Minnesota, Iowa, Nebraska, North Dakota and Wisconsin income taxes. Tax years subsequent to 2019 remain open to examination by federal and state tax authorities. Our policy is to recognize interest and penalties related to income tax matters as income tax expense. As of December 31, 2023, and 2022 we had $0 and $3,518 of interest or penalties accrued that related to income tax matters.

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

	2023		2022
Statutory Tax Rate	21.00	%	21.00	%
Effect of:
State Income Taxes Net of Federal Tax Benefit	(65.32)		8.17
Non deductible goodwill impairment	(217.23)		-
Permanent Differences and Other, Net	3.98		(1.90)
Effective tax rate	(257.57)	%	27.27	%

The Company’s income tax provision was computed based on the federal statutory rate and the average state statutory rates, net of the related federal benefit. The Company’s effective rate for the year ended December 31, 2023 was significantly impacted by a nondeductible goodwill impairment charge. Absent the impairment charge, the Company’s effective tax rate would have been 27.56%.

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

	2023		2022
Deferred Tax Assets
Accrued Expenses	$	(200,541)	$	(382,546)
Deferred Compensation		(86,319)		(118,265)
Other		(219,058)		(106,371)
State NOL		(27,367)		(19,668)
Federal NOL		(4,643,453)		(3,472,536)
Sec. 163(j) business interest limitation		(2,823,686)		-
Leases		(394,736)		(394,878)
Total Deferred Tax Assets		(8,395,160)		(4,494,264)
Deferred Tax Liabilities
Fixed Assets		26,429,560		21,076,220
Intangible Assets		3,089,966		3,591,783
Investments		723,264		1,322,296
Unrealized Gain on SWAP		383,247		632,007
Contract Assets		416,359		226,698
Leases		384,863		382,790
Total Deferred Tax Liabilities:		31,427,259		27,231,794
Total Net Deferred Taxes	$	23,032,099	$	22,737,530

As of December 31, 2023, the Company has net operating loss carryforwards of approximately $22.1 million for tax purposes, which will be available to offset future taxable income. The losses may be carried forward indefinitely.