Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.20.2
Income Taxes
12 Months Ended
Jun. 30, 2020
Income Tax Disclosure [Abstract]  
Income Taxes

12. Income Taxes

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

Fiscal years ended June 30,

2020

2019

 

Current

Federal

$

489

$

673

State

262

339

751

1,012

 

Deferred

Federal

(37

)

663

State

(141

)

198

(178

)

861

$

573

$

1,873

The reconciliation of income tax expense computed at the federal statutory tax rate of 21% for the fiscal years ended June 30, 2020 and 2019 to the provision for income taxes is as follows (in thousands):

Fiscal years ended June 30,

2020

2019

 

Tax at the statutory rate

$

283

$

1,180

State income taxes, net of federal benefit

67

323

Nondeductible compensation

340

485

Other

(117

)

(115

)

$

573

$

1,873

 

Effective tax rate

42.5

%

33.4

%

EVI Industries, Inc. and Subsidiaries

 

Notes to Consolidated Financial Statements

 

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, 2020 and 2019 were as follows (in thousands):

Fiscal years ended June 30,

2020

2019

 

Deferred tax assets:

Allowance for doubtful accounts

$

106

$

116

Inventory capitalization

385

471

Stock compensation

705

499

Accrued liabilities

221

-

Other

554

46

1,971

1,132

 

Deferred tax liabilities:

Goodwill

(2,120

)

(1,375

)

Depreciation

(412

)

(1,217

)

Intangible assets

(1,167

)

(248

)

(3,699

)

(2,840

)

Net deferred income tax (liabilities) assets

$

(1,728

)

$

(1,708

)

As of June 30, 2020, the Company was subject to potential federal and state tax examinations for the tax years including and subsequent to 2015.

As previously discussed, on December 22, 2017, the U.S. government enacted the Tax Act. The Tax Act represents significant U.S. federal tax reform legislation that includes a permanent reduction to the U.S. federal corporate income tax rate.