Annual report pursuant to Section 13 and 15(d)

Note 12 - Income Taxes

Note 12 - Income Taxes
12 Months Ended
Dec. 31, 2015
Notes to Financial Statements  
Income Tax Disclosure [Text Block]
The components of current and deferred federal and state income tax expense (benefit) for continuing operations for the years ended December 31, consisted of the following (in thousands):
Federal income tax expense (benefit) - current
  $ 116     $ (121 )
Federal income tax expense - deferred
    142       530  
State income tax expense (benefit) - current
    9       (1 )
State income tax expense - deferred
    276       9  
Total income tax expense
  $ 543     $ 417  
We had temporary differences and net operating loss carry forwards from both our continuing and discontinued operations, which gave rise to deferred tax assets and liabilities at December 31, 2015 and 2014 as follows (in thousands):
Deferred tax assets:
Net operating losses
  $ 4,566     $ 4,611  
Environmental and closure reserves
    2,497       2,520  
    2,800       3,129  
Deferred tax liabilities:
Depreciation and amortization
    (1,130 )     (2,322 )
Goodwill and indefinite lived intangible assets
    (5,443 )     (5,006 )
      (25 )
Prepaid expenses
    (122 )     (17 )
      3,168       2,890  
Valuation allowance
    (8,592 )     (7,896 )
Net deferred income tax liabilities
    (5,424 )     (5,006 )
An overall reconciliation between the expected tax expense using the federal statutory rate of 34% and the expense for income taxes from continuing operations as reported in the accompanying Consolidated Statement of Operations is provided below (in thousands).
Tax expense (benefit) at statutory rate
  $ 166     $ (864 )
State tax benefit, net of federal benefit
    (93 )     (66 )
Change in deferred tax rates
Permanent items
    84       137  
Non-deductible Goodwill
Difference in foreign rate
    40       98  
Reversal of deferred tax assets for divested facility (SYA)
Reversal of deferred tax assets on stock compensation
Change in deferred tax liabilities
    (124 )     75  
Increase in valuation allowance
    56        216  
Income tax expense
  $ 543     $ 417  
The provision for income taxes is determined in accordance with ASC 740, “Income Taxes”. Deferred income tax assets and liabilities are recognized for future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred income tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
The Company regularly assesses the likelihood that the deferred tax asset will be recovered from future taxable income. The Company considers projected future taxable income and ongoing tax planning strategies, then records a valuation allowance to reduce the carrying value of the net deferred income taxes to an amount that is more likely than not to be realized. In 2015 and 2014, we determined that it was more likely than not that approximately $8,592,000 and $7,896,000, respectively, of deferred income tax assets would not be realized, and as such, a full valuation allowance was applied against those deferred income tax assets. Our valuation allowance increased by $56,000 and $216,000 for the years ended December 31, 2015 and 2014, respectively.
We have estimated net operating loss carryforwards (NOLs) for federal and state income tax purposes of approximately $4,651,000 and $52,784,000, respectively, as of December 31, 2015. These net operating losses can be carried forward and applied against future taxable income, if any, and expire in various amounts starting in 2021. However, as a result of various stock offerings and certain acquisitions, which in the aggregate constitute a change in control, the use of these NOLs will be limited under the provisions of Section 382 of the Internal Revenue Code of 1986, as amended. Additionally, NOLs may be further limited under the provisions of Treasury Regulation 1.1502-21 regarding Separate Return Limitation Years.
The Company accounts for uncertainties in income taxes pursuant to ASC 740. A reconciliation of the beginning and ending amount of our unrecognized tax expense is summarized as follows (in thousands):
Balances at beginning of year
  $     $ 180  
Reduction related to prior year tax position
          (180 )
Balances at end of the year
  $     $  
Includes $26,000 in interest and penalties.
The tax years 2012 through 2014 remain open to examination by taxing authorities in the jurisdictions in which the Company operates.
As of December 31, 2015 and 2014, the Company had approximately $32,000 and $85,000 of federal income tax payable, respectively.