NOTE 4 – INCOME TAXES

Transcat's net income before income taxes on the Consolidated Statements of Income is as follows:

	FY 2015		FY 2014
United States	$	6,115	$	6,642
Foreign		308		(196	)
Total	$	6,423	$	6,446

The net provision for income taxes for fiscal years 2015 and 2014 is as follows:

	FY 2015			FY 2014
Current Tax Provision:
Federal	$	1,200		$	2,404
State		311			354
Foreign		107			13
		1,618			2,772
Deferred Tax (Benefit) Provision:
Federal		776			(248	)
State		64			(10	)
Foreign		(61	)		(52	)
		779			(310	)
Provision for Income Taxes	$	2,397		$	2,462

A reconciliation of the income tax provision computed by applying the statutory U.S. federal income tax rate and the income tax provision reflected in the Consolidated Statements of Income is as follows:

	FY 2015			FY 2014
Federal Income Tax at Statutory Rate	$	2,184		$	2,192
State Income Taxes, net of Federal benefit		220			258
Other, net		(7	)		12
Total	$	2,397		$	2,462

The components of the net deferred tax assets (liabilities) are as follows:

	March 28, 2015			March 29, 2014
Deferred Tax Assets:
Accrued Liabilities	$	384		$	366
Performance-Based Grants		395			809
Inventory Reserves		143			130
Non-Qualified Deferred Compensation Plan		362			290
Postretirement Health Care Plans		385			339
Stock-Based Compensation		810			816
Net Operating Loss Carryforward		—			179
Other		263			255
Total Deferred Tax Assets		2,742			3,184
Deferred Tax Liabilities:
Goodwill and Intangible Assets		(1,754	)		(1,334	)
Depreciation		(1,544	)		(971	)
Other		(80	)		(90	)
Total Deferred Tax Liabilities		(3,378	)		(2,395	)
Net Deferred Tax (Liabilities) Assets	$	(636	)	$	789

Deferred U.S. income taxes have not been recorded for basis differences related to the investments in the Company's foreign subsidiary. The Company considers undistributed earnings, if any, as permanently reinvested in the subsidiary. The determination of a deferred tax liability on unremitted earnings would not be practicable because such liability, if any, would depend on circumstances existing if and when remittance occurs.

The Company files income tax returns in the U.S. federal jurisdiction, various states and Canada. The Company is no longer subject to examination by U.S. federal income tax authorities for the fiscal years 2011 and prior, state tax authorities for the fiscal years 2009 and prior, and by Canadian tax authorities for the fiscal years 2007 and prior. The Company is currently under examination by the Internal Revenue Service (the “IRS”) for the Company's U.S. federal income tax return for the tax year ended March 30, 2013. To date, the IRS has not proposed any adjustments to the tax return under examination. There are no tax years currently under examination by state or Canadian tax authorities.

During fiscal years 2015 and 2014, there were no uncertain tax positions, and the Company expects no material uncertain tax positions within the next twelve months. The Company recognizes interest and penalties, if any, related to uncertain tax positions in the provision for income taxes. No interest or penalties related to uncertain tax positions were recognized in fiscal years 2015 and 2014 or were accrued at March 28, 2015 and March 29, 2014.