Note 8 - Income Taxes

3 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 8 - Income Taxes

For the three months ended December 31, 2015, the Company recorded an income tax benefit of $185,000 on pretax loss of $135,000. The income tax benefit was the result of applying the effective tax rate anticipated for fiscal 2016 to pretax loss for the first quarter of fiscal 2016. The effective tax rate was lower than the statutory rate primarily due to the dividends received deduction.  On pretax income of $408,000 for the three months ended December 31, 2014, the Company recorded a tax benefit of $25,000 which was the net result of applying the effective tax rate anticipated for fiscal 2015 to pretax income for the first quarter of fiscal 2015. The Company’s effective tax rate was 137% and -6% for the three months ended December 31, 2015 and 2014, respectively.  The Company files federal income tax returns in the United States and with various state jurisdictions and is no longer subject to examinations for fiscal years before fiscal 2012 with regard to federal income taxes and fiscal 2011 for state income taxes.

At December 31, 2015, the Company had an

accrued liability of approximately $2,925,000 for uncertain and unrecognized tax benefits relating to an acquisition in fiscal 2013, after a reduction of $319,000 resulting from the recognition of deferred revenues and from the amortization of goodwill for tax purposes.  The Company does not anticipate a significant increase or decrease in this liability in the next twelve months.   If recognized, it is expected that these unrecognized tax benefits would not have a significant impact to the Company’s effective tax rate.  During the first quarter of fiscal 2015, interest expenses of approximately $24,000 were recorded as “interest and penalty expense accrued for uncertain and unrecognized tax benefits” in the Statement of Comprehensive Income.