Note 7 - Income Taxes

12 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE 7. INCOME TAXES

     Income tax provisions for fiscal 2014 through 2016 consisted of the following:

		Year Ended March 31
		2016			2015		2014
Current taxes
Federal	$	5,754,428		$	6,608,923	$	5,010,734
State		186,822			330,971		304,931
Deferred taxes
Federal		(55,254	)		125,070		61,306
State		(1,214	)		6,356		3,103
Income tax provision	$	5,884,782		$	7,071,320	$	5,380,074

    A reconciliation of income tax provisions at the U.S. statutory rate for fiscal 2014 through 2016 is as follows:
 

	Year Ended March 31
	2016			2015			2014
Tax expense at U.S. statutory rate	$	6,272,341		$	7,503,886		$	5,667,281
State income taxes, net of Federal benefit		118,057			216,518			199,751
Domestic manufacturing deduction		(476,932	)		(600,207	)		(443,708	)
Municipal interest		(4,171	)		(11,489	)		(28,456	)
Other		(24,513	)		(37,388	)		(14,794	)
Income tax provision	$	5,884,782		$	7,071,320		$	5,380,074

     Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities as of March 31, 2016 and 2015 were as follows:
 

	March 31
	2016			2015
Vacation accrual	$	118,611		$	114,217
Inventory reserve		90,825			65,394
Depreciationand amortization		(30,174	)		(63,631	)
Stock-based compensation deductions		115,257			107,570
Unrealized gain on marketable securities		(257,545	)		(425,922	)
Other		14,214			28,716
Net deferred tax assets (liabilities)	$	51,188		$	(173,656	)
Reported as:
Deferred tax assets	$	-		$	102,052
Long-term deferred tax assets		51,188			-
Long-term deferred tax liabilities		-			(275,708	)
Net deferred tax assets (liabilities)	$	51,188		$	(173,656	)

     Realizations of stock-based compensation deductions are credited to “Additional paid-in capital” and included in “Tax benefit of stock-based compensation” on our statements of shareholders’ equity. Credits of $352,294 in fiscal 2016 and $24,288 in fiscal 2015 were attributed to stock-based compensation deductions. The “Additional paid-in capital” credits also included the tax benefit of stock-based compensation deductions in those years.

     The amounts credited to “Additional paid-in capital” were the tax benefits of the deductions to the extent they exceeded the corresponding compensation expense recognized for financial reporting purposes. “Tax benefit of stock-based compensation” represented the tax benefits of deductions for stock-based compensation to the extent they exceeded the corresponding compensation expense recognized for financial reporting purposes. Cash we received from the exercise of stock options related to excess tax benefits is included in “Proceeds from sale of common stock” in the statement of cash flows for the year in which the option was exercised and cash received.

     We had no unrecognized tax benefits as of March 31, 2016, and we do not expect any significant unrecognized tax benefits within 12 months of the reporting date. We recognize interest and penalties related to income tax matters in income tax expense. As of March 31, 2016 we had no accrued interest related to uncertain tax positions. The tax years 1999 and 2012 through 2015 remain open to examination by the major taxing jurisdictions to which we are subject.