ALPHA PRO TECH LTD Income Taxes Disclosure
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10. |
Income Taxes |
The provision (benefit) for income taxes consisted of the following:
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For the Years Ended December 31, |
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2024 |
2023 |
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Current |
$ | 1,030,000 | $ | 1,558,000 | ||||
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Deferred |
61,000 | (322,000 | ) | |||||
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Provision for income taxes |
$ | 1,091,000 | $ | 1,236,000 | ||||
Deferred income tax assets (liabilities) consisted of the following:
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December 31, |
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2024 |
2023 |
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Temporary differences: |
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Property and equipment |
$ | (1,234,000 | ) | $ | (858,000 | ) | ||
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Intangible assets |
158,000 | 102,000 | ||||||
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Inventory reserve |
87,000 | 61,000 | ||||||
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Accrued expenses and inventory |
392,000 | 199,000 | ||||||
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Right of Use Asset |
(1,872,000 | ) | (1,281,000 | ) | ||||
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Foreign exchange |
29,000 | 16,000 | ||||||
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Lease Liability |
1,885,000 | 1,289,000 | ||||||
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AMT/Foreign tax credits |
188,000 | 141,000 | ||||||
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State income taxes |
(136,000 | ) | (111,000 | ) | ||||
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Net deferred income tax liabilities |
$ | (503,000 | ) | $ | (442,000 | ) | ||
The provision for income taxes differs from the amount that would be obtained by applying the U.S. statutory rate to income before income taxes as a result of the following:
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For the Years Ended December 31, |
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2024 |
2023 |
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Income taxes based on U.S. statutory rate of 21% |
$ | 1,054,000 | $ | 1,150,000 | ||||
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Non-deductible meals & entertainment |
9,000 | 12,000 | ||||||
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FDII deduction |
(5,000 | ) | (6,000 | ) | ||||
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Foreign taxes |
(136,000 | ) | (82,000 | ) | ||||
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State taxes |
200,000 | 169,000 | ||||||
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Stock Compensation |
(33,000 | ) | 18,000 | |||||
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Other |
2,000 | (25,000 | ) | |||||
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Provision for income taxes |
$ | 1,091,000 | $ | 1,236,000 | ||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Mar 12, 2025 | Showing above |
| 2022 | Mar 16, 2023 | |
| 2021 | Mar 11, 2022 | |
| 2019 | Mar 10, 2020 | |
| 2018 | Mar 6, 2019 | |
| 2017 | Mar 12, 2018 | |
| 2016 | Mar 8, 2017 | |
| 2015 | Mar 3, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.