UTAH MEDICAL PRODUCTS INC Income Taxes Disclosure
Note 7 – Income Taxes
Deferred tax assets (liabilities) consist of the following temporary differences:
|
| December 31, | |||
| 2024 | 2023 | 2022 | ||
Inventory write-downs and differences due to UNICAP |
| $ 270 | $ 110 | $ 103 | |
Allowance for doubtful accounts |
| 29 | 31 | 39 | |
Accrued liabilities and reserves |
| 50 | 90 | 90 | |
Depreciation and amortization |
| (1,451) | (1,673) | (2,295) | |
Deferred income taxes, net |
| $ (1,102) | $ (1,442) | $ (2,063) | |
The components of income tax expense are as follows:
|
| Years ended December 31, | ||
| 2024 | 2023 | 2022 | |
Current |
| $ 3,268 | $ 4,075 | $ 4,632 |
Deferred |
| (340) | (621) | (446) |
Total |
| $ 2,928 | $ 3,454 | $ 4,186 |
Income tax expense differed from amounts computed by applying the statutory federal rate to pretax income as follows:
|
| Years ended December 31, | ||
| 2024 | 2023 | 2022 | |
Federal income tax expense at the statutory rate |
| $ 2,794 | $ 2,346 | $ 2,620 |
State income taxes |
| 504 | 439 | 490 |
Foreign income taxes (blended rate) |
| (1) | 951 | 1,129 |
R&D tax credits and manufacturing profit deduction |
| (18) | (3) | (3) |
Tax-exempt income |
| (201) | (195) | - |
Change in Rate |
| - | - | - |
Other |
| (150) | (84) | (50) |
Total |
| $ 2,928 | $ 3,454 | $ 4,186 |
The domestic and foreign components of income before income tax expense were as follows:
|
| Years ended December 31, | ||
| 2024 | 2023 | 2022 | |
Domestic |
| $ 13,306 | $ 11,170 | $ 12,475 |
Foreign |
| 3,496 | 8,919 | 8,184 |
Total |
| $ 16,802 | $ 20,089 | $ 20,659 |
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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.