Income Taxes

The provision for (benefit from) income taxes consists of the following:

	2016		2015		2014
Current:
Federal	$	-	$	-	$	-
State		11,286		16,596		12,933
Total current		11,286		16,596		12,933

Deferred:
Federal		(100,174)		(552,167)		(1,050,750)
State		(3,495)		(66,542)		(102,199)
Valuation Allowance		393,814		618,709		800,203
Total deferred		290,145		-		(352,746)
	$	301,431	$	16,596	$	(339,813)

A reconciliation of income taxes, with the amounts computed at the statutory federal rate is as follows:

	2016		2015		2014

Computed tax at federal statutory rate	$	(681,156)	$	(598,643)	$	(1,069,547)
State income taxes, net of federal tax (benefit) provision		(38,971)		(29,799)		(62,712)
Non deductible expenses		13,915		14,683		18,141
Federal research credit		(15,144)		(6,738)		(15,328)
Book tax depreciation adjustment		517,736		-		-
Stock Options - Expired		122,508		-		-
Other, net		(11,271)		18,384		(10,570)
Valuation Allowance		393,814		618,709		800,203
Total	$	301,431	$	16,596	$	(339,813)

The deferred tax assets and deferred tax liabilities recorded on the balance sheet as of June 30, 2016 and 2015 are as follows:

	2016				2015
	Deferred Tax Assets		Deferred Tax Liabilities		Deferred Tax Assets		Deferred Tax Liabilities

Current:
Bad debts	$	40,000	$	—	$	40,000	$	—
Prepaid expenses		—		16,173		—		20,093
Accrued liabilities		391,645		—		352,469		—
Inventory		—		1,134,160		—		1,140,283
		431,645		1,150,333		392,469		1,160,376

Non Current:
Depreciation		—		841,040		—		470,768
Net operating loss and credit carryforwards		4,062,817		—		3,522,219		—
Intangible assets		3,635		—		2,471		—
Accrued pension liability		26,098		—		27,656		—
Stock options		68,688		—		321,845		—
Other		—		75,819		—		94,639
		4,161,238		916,859		3,874,191		565,407
Valuation Allowance		(1,812,726)		—		(1,418,912)		—
Total deferred taxes	$	2,780,157	$	2,067,192	$	2,847,748	$	1,725,783

At June 30, 2016, there were $10.1 million dollars of federal net operating loss carryforwards which will expire in 2031 through 2036. In addition, the Company has state tax net operating losses of approximately $5.9 million on a post-apportioned basis that expire in varying years from 2029 through 2036.

The Company files a federal and multiple state income tax returns. With few exceptions the Company’s federal and state income tax returns are open for fiscal years ending after June 30, 2013.

Management of the Company is not aware of any additional uncertain tax positions taken on its federal or state income tax filings for open tax years.