Note 11 - Income Taxes

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

11. Income Taxes

The provision for income taxes consisted of the following:

	For the Years Ended December 31,
	2014		2013
Current	$	934,000	$	888,000
Deferred		267,000		(3,000	)
	$	1,201,000	$	885,000

Deferred income tax assets (liabilities) consisted of the following:

	December 31,
	2014			2013
Current deferred income taxes:
Foreign tax credits	$	16,000		$	51,000
Temporary differences:
Inventory reserve		158,000			204,000
Accrued expenses and inventory		312,000			385,000
Current deferred income tax assets, net	$	486,000		$	640,000
Non-current deferred income taxes:
Temporary differences:
Property and equipment	$	(755,000	)	$	(696,000	)
Intangible assets		(3,000	)		(3,000	)
Marketable securities		(758,000	)		(374,000	)
Basis difference in investments		(129,000	)		(119,000	)
Foreign exchange		(35,000	)		(21,000	)
State income taxes		(72,000	)		(44,000	)
Non-current deferred tax liabilities		(1,752,000	)		(1,257,000	)
Net deferred income tax liability	$	(1,266,000	)	$	(617,000	)

The provision for income taxes differs from the amount that would be obtained by applying the US statutory rate to income before income taxes as a result of the following:

	For the Years Ended December 31,
	2014			2013
Income taxes based on US statutory rate of 34%	$	1,340,000		$	1,008,000
Non-deductible meals and entertainment		5,000			5,000
Domestic manufacturer's deduction		(41,000	)		(53,000	)
Foreign taxes		(102,000	)		(71,000	)
State taxes		88,000			70,000
Other		(89,000	)		(74,000	)
	$	1,201,000		$	885,000

In 2012, the Company modified its tax reporting for Harmony, which lowered the Company’s effective tax rate for the year ended December 31, 2013. The Company recorded an uncertain tax position liability of approximately $342,000 as of December 31, 2012. The uncertain tax position liability was reduced during 2013 after it was determined that certain tax returns could not be amended.

Unrecognized tax benefits during the years ended December 31, 2014 and 2013 were as follows:

	For the Years Ended December 31,
	2014		2013
Balance as of January 1	$	194,000	$	342,000
Gross increase from tax positions taken during the year		-		-
Gross increase from tax positions taken during prior periods		-		-
Reductions to unrecognized tax benefits		-		(148,000	)
Balance as of December 31	$	194,000	$	194,000