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Note 8 - Income Tax
6 Months Ended
Dec. 31, 2013
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]

Note 8:   Income Tax


The Company is subject to U.S. federal income tax and various state, local and foreign income taxes in numerous jurisdictions.  The Company’s domestic and foreign tax liabilities are subject to the allocation of revenues and expenses in different jurisdictions and the timing of recognizing revenues and expenses.  Additionally, the amount of income taxes paid is subject to the Company’s interpretation of applicable tax laws in the jurisdictions in which it files.


The Company provides for income taxes on an interim basis based on an estimate of the effective tax rate for the year. This estimate is reassessed on a quarterly basis. Discrete tax items are accounted for in the quarterly period in which they occur.


The effective tax rate for the second quarter of fiscal 2014 was 39.4%. The effective tax rate for the second quarter of fiscal 2013 was 57.5%. For the first half of fiscal 2014, it was 47.2% and for the first half of fiscal 2013, it was 67.4%. No tax benefit has been recognized for losses in certain foreign subsidiaries which, together with low overall profitability, was the primary reason for the high effective tax rate in the first half of fiscal 2013. In the first half of fiscal 2014, there was a discrete tax charge of $278,000 for the effect of a tax rate decrease in the UK applied to the net deferred tax assets in that jurisdiction. In the first half of fiscal 2013, a discrete tax benefit was booked reducing the Company’s net tax liability for uncertain tax positions by $91,000.


U.S. Federal tax returns through fiscal 2009 are generally no longer subject to review by tax authorities; however, tax loss carryforwards from years before fiscal 2010 are still subject to review. As of December 31, 2013, the Company has substantially resolved all income tax audits pending from earlier quarters and there were no other local or US federal income tax audits in progress as of December 31, 2013. In international jurisdictions including Argentina, Australia, Brazil, Canada, China, Germany, Japan, Mexico, New Zealand, Singapore and the UK, which comprise a significant portion of the Company’s operations, the years that may be examined vary by country. In the second quarter of fiscal 2014, the Company was notified by tax authorities in China of a tax review and they have requested certain documentation for the calendar year 2012. The Company’s most significant foreign subsidiary in Brazil is subject to audit for the years 2008 – 2013.


The Company has identified no new uncertain tax positions during the six month period ended December 31, 2013 for which it is currently likely that the total amount of unrecognized tax benefits will significantly increase or decrease within the next twelve months.


No valuation allowance has been recorded for the Company’s domestic federal net operating loss (NOL) carryforwards. The Company continues to believe that due to forecasted future taxable income and certain tax planning strategies available, it is more likely than not that it will be able to utilize the federal NOL carry forwards. The valuation allowance for subsidiary NOL’s in certain foreign countries, notably China, are being released in fiscal 2014 to the extent of forecasted taxable income in fiscal 2014.