| 11. | INCOME TAXES |
The components of income taxes are as follows:
| Year Ended September 30, | ||||||||
| 2017 | 2016 | |||||||
| Federal | ||||||||
| Current | $ | - | $ | 2,229,033 | ||||
| Deferred | (67,132 | ) | 260,693 | |||||
| Total | (67,132 | ) | 2,489,726 | |||||
| State | ||||||||
| Current | - | 362,474 | ||||||
| Deferred | (13,236 | ) | 46,005 | |||||
| Total | (13,236 | ) | 408,479 | |||||
| Total income tax expense (benefit) | $ | (80,368 | ) | $ | 2,898,205 | |||
The provision for income taxes differs from the amount computed by applying the federal statutory rate of 34% on income from operations, as indicated in the following analysis:
| Year Ended September 30, | ||||||||
| 2017 | 2016 | |||||||
| Statutory rate | -34.00 | % | 34.00 | % | ||||
| Meals and other | 22.62 | % | 7.30 | % | ||||
| State income taxes | -5.78 | % | 5.90 | % | ||||
| Effective tax rate | -17.16 | % | 47.20 | % | ||||
Deferred income taxes provide for significant differences between the basis of assets and liabilities for financial reporting and income tax reporting. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized.
The income tax effects of temporary differences giving rise to the deferred tax assets and liabilities are as follows:
| Year Ended September 30, | ||||||||
| 2017 | 2016 | |||||||
| Deferred income tax assets | ||||||||
| Long-term | ||||||||
| Net operating loss carryforward | $ | 180,605 | $ | - | ||||
| Other deferred assets | 1,213,461 | 1,399,152 | ||||||
| Total deferred income tax assets | 1,394,066 | 1,399,152 | ||||||
| Continuing operations | 1,394,066 | 1,399,152 | ||||||
| Discontinued operations | - | - | ||||||
| Total deferred income tax assets | $ | 1,394,066 | $ | 1,399,152 | ||||
| Deferred income tax liabilities | ||||||||
| Long-term | ||||||||
| Property and equipment | $ | 1,857,088 | $ | 1,941,913 | ||||
| Other deferred liabilities | (16,465 | ) | (15,836 | ) | ||||
| Total deferred income tax liabilities-LT | 1,840,623 | 1,926,077 | ||||||
| Continuing operations | 1,840,623 | 1,926,077 | ||||||
| Discontinued operations | - | - | ||||||
| Total deferred income tax liabilities-LT | $ | 1,840,623 | $ | 1,926,077 | ||||
The Company does not believe that it has any unrecognized tax benefits included in its consolidated financial statements that require recognition. The Company has not had any settlements in the current period with taxing authorities, nor has it recognized tax benefits as a result of a lapse of the applicable statute of limitations. The Company recognizes interest and penalties accrued related to unrecognized tax benefits, if applicable, in general and administrative expenses.