INCOME TAXES

3 Months Ended

Mar. 31, 2012

INCOME TAXES

INCOME TAXES

NOTE 4.  INCOME TAXES

On a quarterly basis, we estimate what our effective tax rate will be for the full fiscal year and record a quarterly income tax provision based on the anticipated rate.  As the year progresses, we refine our estimate based on the facts and circumstances by each tax jurisdiction.  Our effective tax rate for the three months ended March 31, 2012 was 32%, compared with 33% for the three months ended March 31, 2011, respectively.  The effective tax rate for the year ended December 31, 2012 is expected to be 35% compared to 34% for the year ended December 31, 2011.

The differences between federal income taxes computed at the federal statutory rate and reported income taxes for the three months ended March 31, 2012 and 2011 are as follows:

	Three Months Ended
	March 31
	2012			2011
Statutory federal tax provision	$	62,000		$	319,000
State income taxes	4,000			27,000
Income tax credits	(3,000		)	(16,000		)
Reserve for uncertain tax positions	10,000			(7,000		)
Other	(14,000		)	(10,000		)
Income tax expense	$	59,000		$	313,000

At March 31, 2012 we had $121,000 of net uncertain tax benefit positions recorded in other long-term liabilities that would reduce our effective income tax rate if recognized.  The $3,000 increase from December 31, 2011 was related to 2012 R&E credits.