Note 11 - Income Taxes

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Income Tax Disclosure [Text Block]

11. Income Taxes

The provision (benefit) for income taxes consisted of the following

:

	For the Years Ended December 31,
	2015			2014
Current	$	528,000		$	934,000
Deferred		(48,000	)		267,000
	$	480,000		$	1,201,000

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

	December 31,
	2015			2014
Current deferred income taxes:
Foreign tax credits	$	66,000		$	16,000
Temporary differences:
Inventory reserve		107,000			158,000
Accrued expenses and inventory		311,000			312,000
Current deferred income tax assets, net	$	484,000		$	486,000
Non-current deferred income taxes:
Temporary differences:
Property and equipment	$	(681,000	)	$	(755,000	)
Intangible assets		(3,000	)		(3,000	)
Marketable securities		78,000			(758,000	)
Basis diffence in investments		(129,000	)		(129,000	)
Foreign exchange		(45,000	)		(35,000	)
Other		(12,000	)		-
State income taxes		(75,000	)		(72,000	)
Non-current deferred income tax liabilities		(867,000	)		(1,752,000	)
Net deferred income tax liability	$	(383,000	)	$	(1,266,000	)

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,
	2015			2014
Income taxes based on US statutory rate of 34%	$	518,000		$	1,340,000
Non-deductible meals and entertainment		7,000			5,000
Domestic manufacturer's deduction		(18,000	)		(41,000	)
Foreign taxes		(11,000	)		(102,000	)
State taxes		75,000			88,000
Other		(91,000	)		(89,000	)
	$	480,000		$	1,201,000

In 2012, the Company modified its tax reporting for Harmony, which lowers the Company’s effective tax rate. 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 to $194,000 after it was determined that certain tax returns could not be amended.

Unrecognized tax benefits during the years ended December 31, 2015 and 2014 were as follows:

	For the Years Ended December 31,
	2015		2014
Balance as of January 1	$	194,000	$	194,000
Gross increase from tax positions taken during the year		-		-
Gross increase from tax positions taken during prior periods		-		-
Reductions to unrecognized tax benefits		-		-
Balance as of December 31	$	194,000	$	194,000