14. Income Taxes
|9 Months Ended|
Jun. 30, 2017
|Income Tax Disclosure [Abstract]|
The income tax rate for the six months ended June 30, 2017 and June 30, 2016 was 39.5% and (388.6)% respectively. The effective income tax rate differs than the U.S. federal statuary rate primarily due to state taxes, changes in valuation allowances, and certain non-deductible expenses. As of June 30, 2017, and June 30, 2016 the Company had no uncertain tax positions. There was no goodwill impairment. The Company is subject to taxation and files income tax returns in the U.S., and various state jurisdictions. The Company is subject to audit for U.S. purposes for the current and prior three years; and for state purposes the current and prior four years. The Company has net operating loss carry-forwards of approximately $23.3 million for U.S. income tax purposes, these net operating loss carryforwards are subject to IRC Section 382 limitations and begin to expire in 2027.
In June of 2016, the Company removed and released $12,174,931 of valuation allowance relative to its deferred tax assets. ASC 740-10-30 provides that a valuation allowance should be recorded for any portion of a company’s deferred tax assets not expected to be realized in the future. All available evidence, both positive and negative, shall be considered to determine whether, based on the weight of that evidence, a valuation allowance for deferred tax assets. Future realization of the tax benefit ultimately depends on the existence of sufficient taxable income. In consideration of all of the available evidence, management made the decision that it is more likely than not the Company’s entire deferred tax asset will be realized in future years and the valuation allowance should be removed.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://www.xbrl.org/2003/role/presentationRef