v3.26.1
Note 10 - Income Taxes
12 Months Ended
Jun. 30, 2026
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

10. Income Taxes

The following are the components of income taxes provision (benefit) (in thousands):

 

Fiscal years ended June 30,

 

2026

  

2025

 
         

Current

        

Federal

 $2,310  $3,200 

State

  357   1,148 
   2,667   4,348 
         

Deferred

        

Federal

  1,170   (638)

State

  220   (183)
   1,390   (821)
  $4,057  $3,527 
  
 In accordance with ASU 2023-09, the following table summarizes differences between income tax expense (benefit) at the statutory federal income tax rate and as presented on the consolidated statements of operations (dollars in thousands):

 

Fiscal years ended June 30,

 

2026

  

2025

 
                 

Tax at the statutory rate

 $2,473   21.0% $2,313   21.0%

State income taxes, net of federal benefit (1)

  445   3.8%  745   6.8%

Nondeductible compensation

  906   7.7%  518   4.7%

Other

  233   2.0%  (49)  -0.5%

Effective income tax

 $4,057   34.5% $3,527   32.0%

 

 

(1) State taxes in California and Illinois accumulated to over 50% of the tax effect in this category.

 

 

Deferred income taxes reflect the net tax effect of temporary differences between the basis of assets and liabilities for financial reporting purposes and the basis used for income tax purposes. Significant components of the Company’s current and noncurrent deferred tax assets and liabilities as of June 30, 2026 and 2025 were as follows (in thousands):

 

As of June 30,

 

2026

  

2025

 
         

Deferred tax assets:

        

Allowance for credit losses

 $468  $472 

Other reserves

  1,166   1,048 

Inventory capitalization

  980   1,303 

Stock compensation

  1,602   1,325 

Accrued liabilities

  2,115   1,958 

Lease liabilities

  3,004   2,912 

Other

  301   263 
   9,636   9,281 
         

Deferred tax liabilities:

        

Goodwill

  (8,108)  (6,984)

Inventory method changes

  (913)  (1,366)

Depreciation

  (3,754)  (2,701)

Intangible assets

  (2,915)  (3,189)

Right of use assets

  (2,716)  (2,732)

Other

  (311)  - 
   (18,717)  (16,972)

Net deferred income tax (liabilities) assets

 $(9,081) $(7,691)

 

 

A reconciliation of the income tax paid by jurisdiction is as follows:

 

  

For the Year Ended

 
  

June 30, 2026

 

Income taxes paid, net of refunds

 

(in thousands)

 

U.S. federal

 $3,611 

U.S state and local (1)

  1,019 

Total tax payments

 $4,630 

 

 (1) The amount of income taxes paid, net of refunds, does not meet the 5% disaggregation threshold.
  
  
 

As of June 30, 2026, the Company was subject to potential federal and state tax examinations for the tax years including and subsequent to 2021.