Note 12 - Income Taxes |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Text Block] |
The effective tax rates for the three-month and nine-month periods ended June 30, 2026 and 2025 reflected in the table below are less than the combined federal and state statutory rate of 25.74% due to additional tax deductions from the amortization of excess deferred taxes and amortization of RNG tax credits deferred as a regulatory liability. The effective tax rate for the three and nine months ended June 30, 2026 is further reduced primarily due to recognition of amortization of R&D tax credits deferred as a regulatory liability and certain restricted stock-related tax deductions.
During September 2025, the Company participated in the IRS Fast Track Settlement (FTS), which is a process that provides the IRS and taxpayers an opportunity to resolve disputes with an appeals official using mediation skills and settlement authority. The IRS and Company agreed on a settlement equal to 40% of the R&D tax credits claimed for fiscal 2018 and 2019, the two years under examination. The Company refunded the settled R&D tax credits, net of related fees, to customers over a 4-month period from January 2026 to April 2026.
ASC 740 provides for the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recognized in the financial statements. As a result of the FTS, the Company reduced the reserve for unrecognized tax benefits of $273,936 to $0 as of September 30, 2025. The Company evaluated its tax positions for the three and nine months ended June 30, 2026 and has identified any significant uncertain tax positions.
The Company’s policy is to classify interest associated with uncertain tax positions as interest expense in the financial statements. Tax penalties, if any, are netted against other income.
The Company files a consolidated federal income tax return and state income tax returns in Virginia and West Virginia, and thus subject to examinations by federal and state tax authorities. The Company adjusted its income tax assets and liabilities to reflect the outcome of the FTS as of September 30, 2025. With the completion of the IRS examination of the fiscal and federal returns, the federal returns and the state returns for Virginia and West Virginia for the tax years ended through September 30, 2022 are closed to examination.
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