FEDERAL AND STATE INCOME TAXES	9 Months Ended
Sep. 30, 2023
FEDERAL AND STATE INCOME TAXES
FEDERAL AND STATE INCOME TAXES	NOTE 7 – FEDERAL AND STATE INCOME TAXES The Company accounts for income taxes in accordance with FASB Accounting Standards Codification 740, “Income Taxes” (“ASC 740”). Under ASC 740-270 we estimate an annual effective tax rate based on year-to-date operating results and our projection of operating results for the remainder of the year. We apply this annual effective tax rate to the year-to-date operating results. If our actual results differ from the estimated annual projection, our estimated annual effective tax rate can change affecting the tax expense for successive interim results as well as the estimated annual tax expense results. Certain states are not included in the calculation of the estimated annual effective tax rate because the underlying basis for the tax is related to revenues and not taxable income. Amounts for Texas margin taxes are reported as income tax expense. The Company applies a more likely than not recognition threshold for all tax uncertainties. The FASB guidance for uncertain tax positions only allows the recognition of those tax benefits, based on their technical merits that are greater than 50 percent likelihood of being sustained upon examination by the taxing authorities. Management has reviewed the Company’s tax positions and determined there are no uncertain tax positions requiring recognition in the financial statements. U.S. federal tax returns prior to 2018 and Texas margins tax returns prior to 2017 are closed. Generally, the applicable statues of limitations are three to four years from their filings. The Company recorded income tax expense of $22 thousand for the three months ended September 30, 2023 as compared to income tax expense of $21 thousand for the three months ended September 24, 2022. The effective income tax rate for the three months ended September 30, 2023 was (3.2)% as compared to (0.9)% for the three months ended September 24, 2022. The Company recorded income tax expense of $66 thousand for the nine months ended September 30, 2023 as compared to $43 thousand for the nine months ended September 24, 2022. The effective income tax rate for the nine months ended September 30, 2023 and September 24, 2022 was (0.6)%. The effective tax rate differed from the federal statutory rate of 21% primarily due to the effect of the valuation allowances related to the expected unrealized deferred tax asset generated by the current year benefit.

FEDERAL AND STATE INCOME TAXES

9 Months Ended

Sep. 30, 2023

NOTE 7 – FEDERAL AND STATE INCOME TAXES

The Company accounts for income taxes in accordance with FASB Accounting Standards Codification 740, “Income Taxes” (“ASC 740”). Under ASC 740-270 we estimate an annual effective tax rate based on year-to-date operating results and our projection of operating results for the remainder of the year. We apply this annual effective tax rate to the year-to-date operating results. If our actual results differ from the estimated annual projection, our estimated annual effective tax rate can change affecting the tax expense for successive interim results as well as the estimated annual tax expense results. Certain states are not included in the calculation of the estimated annual effective tax rate because the underlying basis for the tax is related to revenues and not taxable income. Amounts for Texas margin taxes are reported as income tax expense.

The Company applies a more likely than not recognition threshold for all tax uncertainties. The FASB guidance for uncertain tax positions only allows the recognition of those tax benefits, based on their technical merits that are greater than 50 percent likelihood of being sustained upon examination by the taxing authorities. Management has reviewed the Company’s tax positions and determined there are no uncertain tax positions requiring recognition in the financial statements. U.S. federal tax returns prior to 2018 and Texas margins tax returns prior to 2017 are closed. Generally, the applicable statues of limitations are three to four years from their filings.

The Company recorded income tax expense of $22 thousand for the three months ended September 30, 2023 as compared to income tax expense of $21 thousand for the three months ended September 24, 2022. The effective income tax rate for the three months ended September 30, 2023 was (3.2)% as compared to (0.9)% for the three months ended September 24, 2022. The Company recorded income tax expense of $66 thousand for the nine months ended September 30, 2023 as compared to $43 thousand for the nine months ended September 24, 2022. The effective income tax rate for the nine months ended September 30, 2023 and September 24, 2022 was (0.6)%. The effective tax rate differed from the federal statutory rate of 21% primarily due to the effect of the valuation allowances related to the expected unrealized deferred tax asset generated by the current year benefit.