XML 42 R14.htm IDEA: XBRL DOCUMENT v2.4.0.8
Note 8 - Income Taxes
9 Months Ended
Jun. 30, 2013
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]

Note 8 - Income Taxes


On a pretax profit of $4,086,000 and $5,343,000 for the nine months ended June 30, 2013 and 2012, respectively, the Company recorded a tax provision of $1,275,000 and $1,385,000 respectively, which was lower in each case than the amount computed using the statutory rate because of the available dividends received deduction and the domestic production activity deduction.  Consequently, the Company’s effective tax rate was 31% and 26% for the nine months ended June 30, 2013 and 2012, respectively. The acquisition of New Dawn was structured as a stock acquisition with an Internal Revenue Code Section 338 (h)(10) election, which results in the acquisition being treated similarly to an acquisition of assets for income tax purposes. As such, the amounts allocated to purchased software and customer relationships as well as goodwill are amortized over a 15-year period on a straight-line basis for tax purposes. Differences in the amortization period and methods between book and tax useful lives will result in deferred tax assets or liabilities. The Company files federal income tax returns in the United States and with various state jurisdictions and is no longer subject to examinations for years before 2010 with regard to federal income taxes.