Note 7 - Income Taxes
The provision for income taxes consists of the following:
| December 31, | ||||||||
| 2016 | 2015 | |||||||
| Current income tax expense: | ||||||||
| Federal | $ | 63,586 | $ | — | ||||
| State | 1,967 | — | ||||||
| Total current income tax expense | 65,553 | — | ||||||
| Deferred income tax expense: | ||||||||
| Federal | 164,894 | 289,205 | ||||||
| State | 5,100 | 8,945 | ||||||
| Total deferred income tax expense | 169,994 | 298,150 | ||||||
| Total income tax expense | $ | 235,547 | $ | 298,150 | ||||
The reconciliation of income taxes calculated at the statutory rates to our effective tax rate is as follows:
| December 31, | ||||||||
| 2016 | 2015 | |||||||
| Expected tax expense | $ | 216,618 | $ | 270,102 | ||||
| State tax provision, net | 18,812 | 26,656 | ||||||
| Permanent differences | (3,419 | ) | 13,278 | |||||
| Business tax credit applied | — | (33,408 | ) | |||||
| Other, net | 3,536 | 21,522 | ||||||
| Income tax expense | $ | 235,547 | $ | 298,150 | ||||
The income tax effects of temporary differences that give rise to significant portions of deferred tax assets (liabilities) as of December 31, 2016 and 2015 are as follows:
| December 31, | ||||||||
| 2016 | 2015 | |||||||
| Deferred tax assets (liabilities): | ||||||||
| Net operating loss carryforwards | $ | — | $ | 296,543 | ||||
| Accruals, stock based compensation and other | 134,298 | 11,149 | ||||||
| Property and equipment | (107,189 | ) | (3,123 | ) | ||||
| Intangibles assets | (76,549 | ) | (81,666 | ) | ||||
| Charitable contributions | — | 8,549 | ||||||
| Net deferred tax assets (liabilities) | (49,440 | ) | 231,452 | |||||
At December 31, 2015, we had net operating loss carryforwards of $801,500 which begin to expire in 2026. Our net operating loss carryforwards were fully utilized against taxable income for the year ended December 31, 2016.