Note 11 - Income Taxes

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 11.         Income Taxes

Income tax (benefit) expense for the years ended December 31, 2023 and 2022 consists of the following:

	2023			2022
Current income tax (benefit) expense
Federal	$	(3,101	)	$	2,533
State & Local		3,450			7,566
		349			10,099
Deferred income tax (benefit) expense
Federal		(25,650	)		795,001
State & Local		(17,284	)		7,357
		(42,934	)		802,358
Income tax (benefit) expense	$	(42,585	)	$	812,457

The income tax (benefit) expense is at an effective rate different from the federal statutory rate due principally to the following:

	2023			2022
Loss from continuing operations before taxes	$	(1,741,027	)	$	(5,493,471	)
Income tax benefit at federal statutory rate	$	(365,616	)	$	(1,153,629	)
State income tax benefit, net of federal benefit		(247,516	)		13,334
Permanent Differences		(1,782,519	)		155,260
Net Operating Loss ("NOL") expirations		28,617			12,431
Other		31,234			(174,566	)
Change in federal valuation allowance		2,293,215			1,959,627
Income tax (benefit) expense	$	(42,585	)	$	812,457

Deferred Income Taxes

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts 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 were as follows:

	2023			2022
Deferred tax assets:
Net operating losses	$	2,278,585		$	2,649,902
Capital loss carryforward		2,187,720			-
Stock-based compensation		742,282			743,915
Transaction costs		61,623			-
Accrued vacations		41,287			46,665
Accrued commissions		4,980			17,836
Other		14,008			29,534
Deferred tax assets before valuation allowance		5,330,485			3,487,852
Valuation allowance		(5,102,758	)		(2,793,271	)
Net deferred tax assets		227,727			694,581
Deferred tax liabilities:
Intangible Assets		(243,914	)		(753,702	)
Net deferred tax liabilities	$	(16,187	)	$	(59,121	)

The Company has net operating loss carryforwards of approximately $15.4 million, of which $1.2 million will expire, if unused, between the years 2024 and 2037. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets.

The Company has analyzed its income tax positions using the criteria required by U.S. GAAP and concluded that, as of December 31, 2023 and 2022, it has no material uncertain tax positions and no interest and penalties have been accrued. The Company has elected to recognize any estimated penalties and interest on its income tax liabilities as a component of its provision for income taxes.

Our income tax returns are subject to examination by income taxing authorities in all jurisdictions for which we file tax returns, generally for three years after each return was filed, but extending to years from which net operating loss carryforwards are utilized to reduce current year taxes. We are not currently under audit in any jurisdiction.