Annual report pursuant to Section 13 and 15(d)

Income Taxes

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Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The following table summarizes the Company’s income before income taxes (in thousands):
Years Ended December 31,
2023 2022 2021
U.S income $ 1,566  $ 63  $ 1,033 
Non-U.S. income 285  67  224 
Income before income taxes $ 1,851  $ 130  $ 1,257 
The following table summarizes the Company’s components of the consolidated (provision for) benefit from income taxes (in thousands):
Years Ended December 31,
2023 2022 2021
U.S Federal income tax (expense) benefit
Current $ —  $ —  $ — 
Deferred (568) 44  150 
Total U.S. Federal income tax (expense) benefit (568) 44  150 
State and local income tax (expense) benefit
Current (245) (99) (167)
Deferred (65) (65) 3 
Total state and local income tax expense (310) (164) (164)
Foreign income tax (expense) benefit
Current (101) 8  177 
Total income tax (expense) benefit $ (979) $ (112) $ 163 
The following table summarizes a reconciliation of the Company’s income tax (expense) benefit from the effective income tax rate to the U.S. federal statutory rate (in thousands):
Years Ended December 31,
2023 2022 2021
Income tax expense at the statutory rate $ (389) $ (27) $ (264)
State and local income tax expense (245) (130) (130)
Foreign income tax (16) (4) (12)
Share-Based compensation and other permanent differences (260) (58) 462
Credits (39) 79 34
Other adjustments (30) 28 73
Income tax (expense) benefit at effective income tax rate $ (979) $ (112) $ 163
The following table summarizes the temporary differences and carryforwards that give rise to deferred tax assets and liabilities (in thousands):
December 31, 2023 December 31, 2022
Deferred Federal, state and local tax assets –
Bad debt reserves $ 3,318  $ 2,603 
Stock-based compensation 1,812  1,668 
Net operating loss (a)
 6,400  8,680 
Operating lease liabilities 1,864  1,210 
Accrued compensation 792  552 
Inventories 626  639 
Research & development credits
 555  555 
Other credits 102  141 
Other 616  432 
Total deferred Federal, state and local tax assets
 16,085  16,480 
Deferred Federal, state and local tax liabilities –
Depreciation and asset basis differences (4,131) (4,505)
Goodwill and intangible assets (768) (800)
Right-of-use assets (1,718) (1,075)
Derivative financial instruments (353) (475)
Total deferred Federal, state and local tax liabilities
 (6,970) (6,855)
Net deferred tax assets $ 9,115  $ 9,625 
(a) At December 31, 2023 and 2022, this includes state and local net operating losses of $0.8 million and $1.2 million, respectively.
The Company’s U.S. federal net operating loss carryforward for tax purposes was $26.6 million at December 31, 2023, resulting in a federal deferred tax asset of $5.6 million. Approximately $20.0 million of the Company’s U.S. federal net operating loss carryforwards will begin to expire in various years beginning in 2034. U.S. federal net operating loss carryforwards of $6.6 million have an indefinite life. The Company’s state net operating loss carryforward of approximately $0.8 million is comprised of various jurisdictions. These state net operating losses can be used for a period of 5 to 20 years and vary by state, and if unused, begin to expire in 2024, though a substantial portion expires beyond 2024. Approximately $0.1 million of the state net operating loss carryforwards have an indefinite life. Tax benefits of operating loss and tax credit carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances.
The Company continues to monitor shifts in past ownership (as defined under Section 382 of the Code).
The Company had no uncertain tax positions for the years ended December 31, 2023 and 2022.
The Company is subject to taxation for Federal and various state jurisdictions in the U.S. and Canada. The Federal income tax returns of the Company for the years 2020 through 2023 are open to examination by the Internal Revenue Service. The Company was under audit with the Internal Revenue Service in relation to the Company’s 2018 federal income tax return and the audit was closed on December 15, 2021. The state income tax returns and other state tax filings of the Company are subject to examination by the state taxing authorities, for various periods generally up to four years after they are filed. Canadian income tax returns of the Company for the years 2019 through 2023 are subject to examination by the Canada Revenue Agency.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security ("CARES") Act was enacted in response to the COVID-19 pandemic. The CARES Act among other things, allows employers to defer the deposit and payment of the employer's share of Social Security taxes. The Company, under the CARES Act, deferred paying $0.7 million of applicable gross payroll taxes as of December 31, 2020, which was included in other liabilities. The $0.7 million balance of the deferred Social Security taxes was paid in two annual installments during the years ending December 31, 2021 and 2022, respectively.