Income Taxes |
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| Income Taxes | 17. Income Taxes
Deferred income tax assets and liabilities are recognized for the expected future tax consequences of events that have been reflected in the financial statements. Deferred tax assets and liabilities are determined based on the differences between the book values and the tax bases of particular assets and liabilities and the tax effects of net operating loss and capital loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in the tax rate is recognized as income or expense in the period that included the enactment date.
The Company has a net operating loss carry-forward for federal and state tax purposes of approximately $105.8 million at June 30, 2022, that is potentially available to offset future taxable income. The Tax Cuts and Jobs Act (the “Tax Act”) changes the rules on net operating loss (NOL) carry-forwards. The 20-year limitation was eliminated for losses incurred after January 1, 2018, giving the taxpayer the ability to carry forward losses indefinitely. However, NOL carry forward arising after January 1, 2018, will now be limited to 80% of taxable income. The $105.8 million available at June 30, 2022 includes $51.0 million of post 2017 NOLs without expiration dates and $54.8 million of pre-2018 NOLs expiring from 2024 to 2037. Given the Company’s projections of taxable income for the years between 2024 and 2037, it’s likely these NOLs will expire unused. The income tax provision benefit differs from the amount of tax determined by applying the Federal and States statutory rates as follows:
There was no current or deferred provision or benefit for income taxes for the fiscal years ended June 30, 2022 and 2021. The components of deferred tax assets as of June 30, 2022 and 2021 are as follows (rounded to nearest thousand):
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