v3.26.3
Income Taxes
 12 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
Income Taxes

NOTE 13 – INCOME TAXES

The components of income tax expense are as follows:

 

Year ended June 30,

 

(In thousands)

2026

 

 

2025

 

Current:

 

 

 

 

 

Federal

$

1,804

 

 

$

1,930

 

State

 

586

 

 

 

944

 

Foreign

 

2,937

 

 

 

1,460

 

Total current

 

5,327

 

 

 

4,334

 

 

 

 

 

 

 

Deferred:

 

 

 

 

 

Federal

 

532

 

 

 

(244

)

State

 

(102

)

 

 

(165

)

Foreign

 

(1,468

)

 

 

(160

)

Total deferred

 

(1,038

)

 

 

(569

)

 

 

 

 

 

 

Income tax expense

$

4,289

 

 

$

3,765

 

On July 1, 2025, The Company prospectively adopted ASU 2023-09. Following the new ASU required disclosures for the year ended June 30, 2026, the reconciling items between the income tax expense computed by applying the U.S. statutory rate of 21% and reported income tax expense are as follows:

 

Year ended June 30, 2026

 

(In thousands)

Amount

 

 

Percent

 

Income tax expense at U.S. statutory rate (21%)

$

4,846

 

 

 

21.1

%

Domestic state and local income taxes, net of federal effect (1)

 

383

 

 

 

1.7

%

Foreign tax effects

 

 

 

 

 

Canada

 

384

 

 

 

1.7

%

Other foreign jurisdictions, net

 

(259

)

 

 

(1.1

%)

Effect of cross-border tax laws

 

 

 

 

 

GILTI inclusions and FDII deductions, net

 

(252

)

 

 

(1.1

%)

Nontaxable or nondeductible items

 

 

 

 

 

Contingent consideration

 

(665

)

 

 

(2.9

%)

Other, net

 

(148

)

 

 

(0.6

%)

 

 

 

 

 

 

Effective tax rate

$

4,289

 

 

 

18.6

%
(1)
State taxes in California and New York made up the majority (greater than 50 percent) of the tax effect in this category.

Income taxes paid, net of refunds, for the fiscal year ended June 30, 2025 totaled $5,783.

Income taxes paid, net of refunds, exceeded 5 percent of total income taxes paid, net of refunds, in the following jurisdictions:

(In thousands)

Year ended June 30, 2026

 

Income taxes paid, net of refunds:

 

 

Federal

$

2,660

 

State and local

 

393

 

Foreign:

 

 

Canada

 

374

 

Mexico

 

530

 

 

 

 

Total

$

3,957

 

 

Prior to the adoption of ASU 2023-09, the following table reconciles income taxes based on the U.S. statutory rate to the Company’s income tax expense:

(In thousands)

Year ended June 30, 2025

 

Income tax expense at U.S. statutory rate (21%)

$

4,453

 

State income taxes, net of federal benefit

 

616

 

Foreign tax rate differential

 

143

 

Permanent differences

 

474

 

Share-based compensation

 

(358

)

GILTI & FDII

 

(222

)

Minority interest from partnership

 

(31

)

Loss on subsidiary

 

(1,100

)

Return to provision true-ups

 

(12

)

Other, net

 

(198

)

 

 

 

Income tax expense

$

3,765

 

The Company’s effective tax rate for the year ended June 30, 2025 is lower than the U.S. statutory rate primarily due to tax benefits resulting from a loss on subsidiary and share-based compensation.

Significant components of deferred tax assets and liabilities are as follows:

 

June 30,

 

(In thousands)

2026

 

 

2025

 

Deferred tax assets (liabilities):

 

 

 

 

 

Allowance for credit losses

$

735

 

 

$

449

 

Accruals

 

1,459

 

 

 

1,283

 

Share-based compensation

 

800

 

 

 

905

 

Operating lease liabilities

 

13,918

 

 

 

15,904

 

Operating lease ROU asset

 

(12,413

)

 

 

(14,158

)

Property, technology, and equipment basis differences

 

(641

)

 

 

(1,581

)

Goodwill deductible for tax purposes

 

(6,500

)

 

 

(7,106

)

Intangible assets

 

1,256

 

 

 

3,427

 

Other, net

 

317

 

 

 

(905

)

 

 

 

 

 

 

Net deferred tax liabilities

$

(1,069

)

 

$

(1,782

)

The Company and its wholly-owned U.S. subsidiaries file a consolidated Federal income tax return. The Company also files unitary or separate returns in various state, local and non-U.S. jurisdictions based on state, local and non-U.S. filing requirements. Tax years that remain subject to examination by the Internal Revenue Service are the fiscal years ended June 30, 2023 through June 30, 2026. Tax years that remain subject to examination by state authorities are the fiscal years ended June 30, 2022 through June 30, 2026. Tax years that remain subject to examination by non-U.S. authorities include the periods ended June 30, 2022 through June 30, 2026. Acquired entities may have tax years that differ from the Company and are still open under the relevant statute of limitations and therefore are subject to potential adjustment. The Company does not have any material uncertain tax positions.