Entity information:
5.
Income Taxes
 
The provision for income taxes consists of the following:
 
 
 
2017
 
2016
 
2015
 
Current:
 
 
 
 
 
 
 
 
 
 
Federal
 
$
-
 
$
-
 
$
-
 
State
 
 
7,299
 
 
11,286
 
 
16,596
 
Total current
 
 
7,299
 
 
11,286
 
 
16,596
 
 
 
 
 
 
 
 
 
 
 
 
Deferred:
 
 
 
 
 
 
 
 
 
 
Federal
 
 
(625,953)
 
 
(100,174)
 
 
(552,167)
 
State
 
 
(84,424)
 
 
(3,495)
 
 
(66,542)
 
Valuation Allowance
 
 
739,578
 
 
393,814
 
 
618,709
 
Total deferred
 
 
29,201
 
 
290,145
 
 
-
 
 
 
$
36,500
 
$
301,431
 
$
16,596
 
 
A reconciliation of income taxes, with the amounts computed at the statutory federal rate is as follows: 
 
 
 
2017
 
2016
 
2015
 
 
 
 
 
 
 
 
 
 
 
 
Computed tax at federal statutory rate
 
$
(697,736)
 
$
(681,156)
 
$
(598,643)
 
State income taxes, net of federal tax (benefit) provision
 
 
(49,124)
 
 
(38,971)
 
 
(29,799)
 
Non deductible expenses
 
 
15,491
 
 
13,915
 
 
14,683
 
Federal research credit
 
 
(9,661)
 
 
(15,144)
 
 
(6,738)
 
Book tax depreciation adjustment
 
 
-
 
 
517,736
 
 
-
 
Expiring State NOLs
 
 
39,697
 
 
 
 
 
 
 
Stock Options - Expired
 
 
15,308
 
 
122,508
 
 
-
 
Other, net
 
 
(17,053)
 
 
(11,271)
 
 
18,384
 
Valuation Allowance
 
 
739,578
 
 
393,814
 
 
618,709
 
Total
 
$
36,500
 
$
301,431
 
$
16,596
 
 
The deferred tax assets and deferred tax liabilities recorded on the balance sheet as of June 30, 2017 and 2016 are as follows:
 
 
 
2017
 
2016
 
 
 
 
 
 
 
 
 
Deferred tax assets
 
 
 
 
 
 
 
Bad debts
 
$
38,500
 
$
40,000
 
Intangible assets
 
 
4,620
 
 
3,635
 
Accrued liabilities
 
 
347,079
 
 
391,645
 
Accrued pension liability
 
 
18,031
 
 
26,098
 
Stock options
 
 
52,211
 
 
68,688
 
Net operating loss and credit carryforwards
 
 
4,554,491
 
 
4,062,817
 
Total Assets
 
 
5,014,932
 
 
4,592,883
 
 
 
 
 
 
 
 
 
Deferred tax liabilities
 
 
 
 
 
 
 
Prepaid expenses
 
 
9,179
 
 
16,173
 
Inventory
 
 
1,057,326
 
 
1,134,160
 
Depreciation
 
 
628,017
 
 
841,040
 
Other
 
 
84,328
 
 
75,819
 
Total Liabilities
 
 
1,778,850
 
 
2,067,192
 
Valuation Allowance
 
 
(2,552,319)
 
 
(1,812,726)
 
Total deferred taxes
 
$
683,763
 
$
712,965
 
 
At June 30, 2017, there were $11.7 million dollars of federal net operating loss carryforwards which will expire in 2031 through 2037. In addition, the Company has state tax net operating losses of approximately $6.2 million that expire in varying years from 2017 through 2037.
 
The Company files a federal and multiple state income tax returns. With few exceptions the Company’s federal and state income tax returns are open for fiscal years ending after June 30, 2014.
 
The Company has not taken any uncertain tax positions on its federal or state income tax  for open tax years.