Note 9 - Income Taxes
|12 Months Ended|
Dec. 31, 2018
|Notes to Financial Statements|
|Income Tax Disclosure [Text Block]||
December 22, 2017,the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act"). The Tax Act makes broad and complex changes to the U.S. tax code, including, but
notlimited to, (
1) reducing the U.S. federal corporate tax rate from
2) eliminating the corporate alternative minimum tax (“AMT”) and changing how existing AMT credits can be realized; (
3) creating a new limitation on deductible interest expense; and (
4) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after
December 31, 2017; (
5) expanding the limitation for executive compensation deductions; and (
100%immediate expensing of qualified property. As a result of the reduced federal corporate tax rate under the Tax Act, the Company reduced the value of its net deferred tax assets
$3.4million to reflect the enacted rate during the year ended
December 31, 2017.This reduction was entirely offset with a corresponding reduction of our valuation allowance which resulted in
nocharge to the tax provision for that year.
The Company files U.S. federal and various U.S. state income tax returns. Due to the Company’s losses, there was
noincome tax expense for the years ended
December 31, 2018and
The income tax provision differs from the amount using the statutory federal income tax rate of
2017for the following reasons:
The effective income tax rate varied from the statutory rate in
2018primarily due to the increase in the valuation allowance. The effective income tax rate varied from the statutory rate in
2017as a result of the change in the federal tax rate under the new Tax Act offset by a change in the valuation allowance.
Deferred tax assets and liabilities consist of the following:
The Company has federal net operating loss (“NOL”) carryforwards of approximately
$24.7million that expire beginning in
2036.Additionally, the Company generated an NOL carryforward of approximately
2018.Under the new Tax Act, this carryforward does
notexpire, but can only offset
80%of taxable income in the year the loss carryforward is used.
The Company has recorded a full valuation allowance against its net total deferred tax assets as of
December 31, 2018and
2017because management determined that it is
notthat those assets will be realized. In assessing the realization of deferred tax assets, management considers whether it is more likely than
notthat some portion or all of deferred assets will
notbe realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.
During the year ended
December 31, 2018,the valuation allowance increased by
$1.9million due to additional net operating losses.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef