Note 7 - Income Taxes

12 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE

7.

INCOME TAXES

     Income tax provisions for fiscal

2015

through

2017

consisted of the following:

	Year Ended March 31
	2017			2016			2015
Current taxes
Federal	$	6,034,924		$	5,754,428		$	6,608,923
State		138,689			186,822			330,971
Deferred taxes
Federal		(25,196	)		(55,254	)		125,070
State		(1,275	)		(1,214	)		6,356
Income tax provision	$	6,147,142		$	5,884,782		$	7,071,320

    A reconciliation of income tax provisions at the U.S. statutory rate for fiscal

2015

through

2017

is as follows:
 

	Year Ended March 31
	2017			2016			2015
Tax expense at U.S. statutory rate	$	6,645,733		$	6,272,341		$	7,503,886
State income taxes, net of Federal benefit		83,116			118,057			216,518
Domestic manufacturing deduction		(536,063	)		(476,932	)		(600,207	)
Municipal interest		(4,207	)		(4,171	)		(11,489	)
Other		(41,437	)		(24,513	)		(37,388	)
Income tax provision	$	6,147,142		$	5,884,782		$	7,071,320

     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,

2017

and

2016

were as follows:
 

	March 31
	2017		2016
Vacation accrual	$	109,298	$	118,611
Inventory reserve		81,743		90,825
Depreciation and amortization		52,378		(30,174	)
Stock-based compensation deductions		86,335		115,257
Unrealized loss (gain) on marketable securities		21,852		(257,545	)
Other		5,449		14,214
Long-term deferred tax assets	$	357,055	$	51,188

     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

$32,616

in fiscal

2017

and

$352,294

in fiscal

2016

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,

2017,

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,

2017

we had

no

accrued interest related to uncertain tax positions. The tax years

1999

and

2013

through

2016

remain open to examination by the major taxing jurisdictions to which we are subject.