Income Tax Provision

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Income Tax Provision

8. Income Tax Provision

There are no uncertain tax positions or unrecognized tax benefits for 2012 and 2011.

The income tax provision (benefit) for income taxes from continuing operations included in the consolidated statements of income consists of the following:

	2012		2011
	($000’s omitted)
Current:
Federal	$	703	$	1,333
State		2		(2	)
		705		1,331
Deferred:
Federal		42		(151	)
State		1		(41	)
		43		(192	)
	$	748	$	1,139

The income tax (benefit) for income taxes from discontinued operations included in the consolidated statements of income consists of the following:

	2012			2011
	($000’s omitted)
Current:
Federal	$	(503	)	$	(454	)
State		-			-
		(503	)		(454	)
Deferred:
Federal		(114	)		(17	)
State		(2	)		-
		(116	)		(17	)
	$	(619	)	$	(471	)

The reconciliation of the difference between the Company’s effective tax rate based upon the total income tax provision (benefit) from continuing operations and the federal statutory income tax rate is as follows:

	2012			2011
Federal statutory rate		34.0	%		34.0	%
Deferred tax adjustment		-			(3.3	%)
Business credits		1.8	%		(2.8	%)
ESOP dividend		(2.8	%)		(1.5	%)
Domestic production activities deduction		(1.8	%)		(2.3	%)
Other		-			0.2	%
State income taxes (less federal effect)		0.1	%		(0.6	%)
Effective tax rate		31.3	%		23.7	%

At December 31, 2012 and 2011, the deferred tax assets (liabilities) were comprised of the following:

	2012			2011
	($000’s omitted)
Inventories	$	319		$	380
Accrued employee compensation and benefit costs		316			373
Operating loss and credit carryforwards		252			300
Other		73			38
Minimum pension liability		44			39
Total deferred tax assets		1,004			1,130
Valuation allowance		(233	)		(270	)
Net deferred tax asset		771			860
Property, plant and equipment		(436	)		(602	)
Total deferred tax liabilities		(436	)		(602	)
Net deferred tax asset	$	335		$	258

At December 31, 2012, the Company has a New York state net operating loss carryforward of approximately $453,000 (approximately a $2,000 net tax benefit) that begin to expire in 2023, which is fully reserved for at December 31, 2012. The Company has a Pennsylvania state net operating loss carryforward of approximately $1,924,000 (approximately a $192,000 net tax benefit) that begins to expire in 2019, which is fully reserved for at December 31, 2012. The Company also has an Arkansas state net operating loss carryforward of approximately $2,478,000 (approximately a $144,000 net tax benefit) that begins to expire in 2015, which is fully reserved for at December 31, 2012.

During the third quarter of 2010, the Internal Revenue Service commenced an examination of the Company’s Federal income tax returns for the years 2008 and 2009. In the first quarter of 2011, the examination was completed and resulted in no material adjustments to the Company’s originally filed returns. The 2009 through 2011 Federal and state tax returns remain open under statute.