Note 6 - Income Taxes

9 Months Ended

Jun. 30, 2012

Income Tax Disclosure [Text Block]

Note 6 - Income Taxes

     On a pretax profit of $5,343,000 and $9,217,000 for the nine months ended June 30, 2012 and 2011, respectively, the Company recorded a tax provision of $1,385,000 and $3,300,000 respectively, which was lower in each case than the amount computed using the statutory rate because of (i) the tax benefits of $1,135,000 from the other-than-temporary impairment losses on investments of $2,855,000, and (ii) the available dividends received deduction and the domestic production activity deduction.  In addition, the Company reached an agreement with the Internal Revenue Service in March 2012 to settle the Company’s previously claimed research and development credits in its tax returns for the years 2002 to 2007.  As a result, the Company’s previously recorded provision for this matter of approximately $700,000 was reduced by $282,000, and the interest expense accrual for this matter of $286,000 was reduced by $62,000.  Consequently, the Company’s effective tax rate was about 26% and 36% for the nine months ended June 30, 2012 and 2011, respectively.   The Company files federal income tax returns in the United States and with various state jurisdictions, and it is no longer subject to examinations for the years before 2010 with regard to federal income taxes.