JEWETT CAMERON TRADING CO LTD Income Taxes Disclosure
6. INCOME TAXES
A reconciliation of the provision for income taxes with amounts determined by applying the statutory U.S. federal income tax rate to income before income taxes is as follows:
| 2025 | 2024 | |||||||
| Computed tax at the federal statutory rate | $ | 53,026 | $ | 92,555 | ||||
| State taxes, net of federal benefit | 30,000 | 10,000 | ||||||
| Other | 3,140 | 669 | ||||||
| Provision for income taxes | $ | 86,166 | $ | 103,224 | ||||
| Current income taxes | $ | 86,166 | $ | 103,224 | ||||
| Deferred income taxes | 157,903 | (21,154 | ) | |||||
| Income tax expense benefit net | $ | 244,069 | $ | 82,070 | ||||
Deferred income tax asset as of August 31, 2025 of $3 (August 31, 2024 – $341,029) reflects the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
| 2025 | 2024 | |||||||
| Deferred tax assets: | ||||||||
| Allowance for inventory | $ | 1,373,812 | $ | 443,913 | ||||
| Allowance for bad debts | — | — | ||||||
| Difference between book and tax depreciation | (76,399 | ) | (13,587 | ) | ||||
| Total deferred tax assets | 1,297,413 | 430,326 | ||||||
| Valuation allowance | (1,210,164 | ) | — | |||||
| Net deferred tax assets | 87,249 | 430,326 | ||||||
| Net deferred tax liability | (87,246 | ) | (89,297 | ) | ||||
| Combined net deferred tax asset (liability) | $ | 3 | $ | 341,029 | ||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Dec 1, 2025 | Showing above |
| 2024 | Nov 20, 2024 | |
| 2023 | Nov 28, 2023 | |
| 2022 | Nov 29, 2022 | |
| 2021 | Nov 29, 2021 | |
| 2020 | Nov 12, 2020 | |
| 2019 | Nov 13, 2019 | |
| 2018 | Nov 15, 2018 | |
| 2017 | Nov 13, 2017 | |
| 2016 | Nov 2, 2016 | |
| 2015 | Nov 6, 2015 | |
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.