Note 7 - Income Taxes |
9 Months Ended | ||
|---|---|---|---|
Sep. 30, 2022 | |||
| Notes to Financial Statements | |||
| Income Tax Disclosure [Text Block] |
Our effective tax rate for the nine-month periods ended September 30, 2022 and September 30, 2021 was and 24.4%, respectively. The period-over-period change was primarily attributable to the geographic mix of our operating results and the larger effect of permanent and discrete adjustments in the current year.
As of December 31, 2021, we have domestic net operating loss (“NOL”) carryforwards of $44,716, which expire 2022 thru 2037, and domestic tax credits of $2,239, which expire 2028 thru 2039, available to reduce future taxable income. As of September 30, 2022, management has concluded it is more likely than not that these domestic NOL and credit carryforwards will be fully utilized.
As of September 30, 2022, for certain past operations in the U.K., we continue to report a valuation allowance for NOL carryforwards of approximately $10,000, nearly all of which can be carried forward indefinitely. Utilization of the net operating losses may be limited due to the change in the past U.K. operation and cannot currently be used to reduce taxable income at our other U.K. subsidiary, Accutronics Ltd. There are no other deferred tax assets related to the past U.K. operations.
As of September 30, 2022, we have recognized a valuation allowance against our other foreign deferred tax assets, as realization is considered to be more likely than not.
As of September 30, 2022, the Company maintains its assertion that all foreign earnings will be indefinitely reinvested in those operations, other than earnings generated in the U.K.
There were unrecognized tax benefits related to uncertain tax positions at September 30, 2022 and December 31, 2021.
As a result of our operations, we file income tax returns in various jurisdictions including U.S. federal, U.S. state and foreign jurisdictions. We are routinely subject to examination by taxing authorities in these various jurisdictions. In August 2020, the Internal Revenue Service (“IRS”) completed its examination of the Company’s federal tax returns for 2016-2018 with no material adjustments identified. Our U.S. tax matters for 2019-2021 remain subject to IRS examination. Our U.S. tax matters for , 2005-2007 and 2011-2015 also remain subject to IRS examination due to the remaining availability of NOL carryforwards generated in those years. Our U.S. tax matters for , 2005-2007 and 2011-2021 remain subject to examination by various state and local tax jurisdictions. Our tax matters for the years through 2021 remain subject to examination by the respective foreign tax jurisdiction authorities. |