INCOME TAXES

12 Months Ended

Sep. 30, 2023

INCOME TAXES

INCOME TAXES

8. INCOME TAXES:

The components of income tax expense from operations for fiscal 2023 and fiscal 2022 consisted of the following:

	2023		2022
Current: Federal	$	2,324,897	$	4,437,197
Current: State		791,731		1,238,823
		3,116,628		5,676,020
Deferred: Federal		2,199,672		677,357
Deferred: State		389,700		120,003
		2,589,372		797,360
Income tax expense	$	5,706,000	$	6,473,380

The difference between the Company’s income tax expense in the accompanying consolidated financial statements and the amount that would be calculated using the statutory income tax rate of 21% for both fiscal 2023 and fiscal 2022 on income from operations before income taxes is as follows:

	2023		2022
Tax at statutory rate	$	3,633,503	$	4,509,855
Nondeductible business expenses		1,313,864		1,333,491
State income taxes, net of federal tax benefit		924,567		1,072,735
Tax attributable to non-controlling interest		(443,831)		(298,305)
Other		277,897		(144,396)
	$	5,706,000	$	6,473,380

Temporary differences between the financial statement carrying balances and tax basis of assets and liabilities giving rise to net deferred tax assets (liabilities) at September 2023 and September 2022 relates to the following:

	2023		2022
Deferred tax assets:
Allowance for doubtful accounts	$	253,252	$	281,927
Accrued expenses		273,313		1,090,219
Inventory		533,723		414,239
Other		618,256		163,399
Interest expense limitation		753,451		—
Net operating loss carry forwards - state		697,013		697,013
Total gross deferred tax assets		3,129,008		2,646,797
Less: Valuation allowance		(697,013)		(697,013)
Total net deferred tax assets		2,431,995		1,949,784
Deferred tax liabilities:
Trade discounts		471,126		418,660
Operating lease, right-of-use assets		97,468		91,954
Property and equipment		5,725,493		2,337,447
Goodwill		921,799		921,799
Other		—		412,221
Intangible assets		134,069		96,291
Total deferred tax liabilities		7,349,955		4,278,372
Total net deferred income tax liability	$	4,917,960	$	2,328,588

The Company had a valuation allowance of approximately $0.7 million at both September 2023 and September 2022, against certain state net operating losses, which more likely than not will not be utilized. The Company had no material unrecognized tax benefits, interest, or penalties during fiscal 2023 or fiscal 2022, and the Company does not anticipate any such items during the next twelve months. The Company’s policy is to record interest and penalties directly related to income taxes as income tax expense in the Consolidated Statements of Operations. The Company files income tax returns in the U.S. and various states and the tax years 2020 and forward remain open under U.S. and state statutes.