Income Tax Provision

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income Tax Provision

8.         Income Tax Provision

The income tax provision from continuing operations included in the consolidated statements of income consists of the following:

	2013			2012
	($000’s omitted)
Current:
Federal	$	215		$	703
State		5			2
		220			705
Deferred:
Federal		30			42
State		9			1
		39			43
	$	259		$	748
The income tax benefit from discontinued operations included in the consolidated statements of income consists of the following:
		2013			2012
	($000’s omitted)
Current:
Federal	$	-		$	(503	)
State		-			-
		-			(503	)
Deferred:
Federal		-			(114	)
State		-			(2	)
		-			(116	)
	$	-		$	(619	)
The reconciliation of the difference between the Company’s effective tax rate based upon the total income tax provision from continuing operations and the federal statutory income tax rate is as follows:
		2013		2012
Federal statutory rate		34.0	%		34.0	%
Business credits		(9.0	%)		1.8	%
ESOP dividend		(2.9	%)		(2.8	%)
Domestic production activities deduction		(2.2	%)		(1.8	%)
Other		0.3	%		-
State income taxes (less federal effect)		0.8	%		0.1	%
Effective tax rate		21.0	%		31.3	%

At December 31, 2013 and 2012, the deferred tax assets (liabilities) were comprised of the following:

	2013			2012
	($000’s omitted)
Inventories	$	333		$	319
Accrued employee compensation and benefit costs		458			316
Operating loss and credit carryforwards		297			252
Other		64			73
Minimum pension liability		14			44
Total deferred tax assets		1,166			1,004
Valuation allowance		(279	)		(233	)
Net deferred tax asset		887			771
Property, plant and equipment		(622	)		(436	)
Total deferred tax liabilities		(622	)		(436	)
Net deferred tax asset	$	265		$	335

In assessing the ability of the Company to realize the benefit of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Based upon the level of historical taxable income, the opportunity for net operating loss carrybacks, and projections for future taxable income over the periods which deferred tax assets are deductible, management believes it is more likely than not the Company will generate sufficient taxable income to realize the benefits of these deductible differences at December 31, 2013, except for a valuation allowance of $279,000 related to certain state net operating loss carryforwards, state tax credit carryforwards and other state net deferred tax assets. At December 31, 2013, the Company has net operating loss carryforwards with full valuation allowances from New York of approximately $453,000, Pennsylvania of approximately $2,240,000 and Arkansas of approximately $2,515,000, which begin to expire in 2023, 2019 and 2015, respectively. The Company also has a New York state tax credit carryforward of approximately $80,000, which begins to expire in 2025.

There are no uncertain tax positions or unrecognized tax benefits for 2013 and 2012. The Company is subject to routine audits of its tax returns by the Internal Revenue Service and various state taxing authorities. The 2010 through 2012 Federal and state tax returns remain subject to examination.