Note 8 - Income Taxes |
9 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Notes to Financial Statements | |
| Income Tax Disclosure [Text Block] |
Note (8) – Income Taxes: Income taxes are recorded in the Company’s quarterly financial statements based on the Company’s estimated annual effective income tax rate, subject to adjustment for discrete events, should they occur.
The Company’s effective tax rate was 30.1% and 42.1% for the nine and three-month periods ended March 31, 2026, respectively, and 32.0% and 39.1% for the nine and three-month periods ended March 31, 2025, respectively. The decrease in the effective tax rate for the nine-month comparable period is attributable to decreases in the Company's taxable presence in the jurisdictions where the Company operates partially offset by an increase in the net impact of permanent book-tax differences resulting primarily from nondeductible compensation. The increase in the effective tax rate for the three-month comparable period is attributable to an increase in the net impact of the permanent book-tax differences resulting primarily from nondeductible compensation partially offset by decreases in the Company's taxable presence in the jurisdictions where the Company operates.
As of March 31, 2026 and June 30, 2025, the Company had net deferred tax liabilities of approximately $7.7 million. Consistent with the guidance of the FASB regarding accounting for income taxes, the Company regularly estimates its ability to recover deferred tax assets and establishes a valuation allowance against deferred tax assets to reduce the balance to amounts expected to be recoverable. This evaluation includes the consideration of several factors, including an estimate of the likelihood of generating sufficient taxable income in future periods over which temporary differences reverse, the expected reversal of deferred tax liabilities, past and projected taxable income, and available tax planning strategies. As of March 31, 2026, management believed that it was more-likely-than-not that the results of future operations will generate sufficient taxable income to realize the amount of the Company’s deferred tax assets over the periods during which temporary differences reverse.
The Company follows ASC Topic 740-10-25, “Accounting for Uncertainty in Income Taxes” (“ASC 740”). ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company’s accounting for income taxes in accordance with this standard did not result in a material adjustment to the Company’s provision for income taxes during the three or nine months ended March 31, 2026 or 2025.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions becoming or to be effective in fiscal 2026. The Company is currently assessing the impact of the provisions of the OBBBA on the Company’s fiscal 2026 consolidated financial statements.
As of March 31, 2026, the Company was subject to potential federal and state tax examinations for the tax years including and subsequent to 2021.
|