Climb Global Solutions Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Income Taxes

Income Taxes

12 Months Ended

Dec. 31, 2014

4. Income Taxes

Deferred tax attributes resulting from differences between financial and accounting amounts and tax basis of assets and liabilities at December 31, 2014 and 2013 are as follows:

	2014		2013
Current assets
Accruals and reserves	$	245	$	218
Net current deferred tax assets	$	245	$	218

	2013			2012
Non-current assets
Accruals and reserves	$	206		$	204
Depreciation and amortization	(24		)	12
Net non-current deferred tax assets	$	182		$	216
Total deferred tax assets	$	427		$	434

The provision for income taxes is as follows:

	Year ended December 31,
	2014			2013			2012
Current:
Federal	$	2,693		$	2,873		$	2,799
State	79			15			536
Foreign	219			49			201
	2,991			2,937			3,536
Deferred:
Federal	6			13			54
State	1			69			10
	7			82			64
	$	2,998		$	3,019		$	3,600
Effective Tax Rate	34.2		%	32.1		%	39.6		%

The current year effective tax rates are higher than the prior year primarily due to fact the prior year included an adjustment to reflect a change in state apportionment rules.

The reasons for the difference between total tax expense and the amount computed by applying the U.S. statutory federal income tax rate to income before income taxes are as follows:

	Year ended December 31,
	2014			2013			2012

Statutory rate applied to pretax income	$	2,978		$	3,200		$	3,090
State income taxes, net of federal income tax benefit	52			91			334
Foreign income taxes under U.S. statutory rate	(56		)	(20		)	(21		)
Other items, including the impact of the change in NJ state tax rate	24			(252		)	197
Income tax expense	$	2,998		$	3,019		$	3,600

The Company receives a tax deduction from the income realized by employees on the exercise of certain non-qualified stock options and restricted stock awards for which the tax effect of the difference between the book and tax deduction is recognized as a component of stockholders’ equity.

The Company has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The Company has identified its federal consolidated tax return and its state tax return in New Jersey and its Canadian tax return as major tax jurisdictions. As of December 31, 2014, the Company’s 2013 Federal tax return remains open for examination, as the Company recently concluded an Internal Revenue Service examination for the 2011 and 2012 tax years. This examination resulted in no change to the previously filed Federal corporate tax returns. The Company’s New Jersey and Canadian tax returns are open for examination for the years 2011 through 2013. The Company’s policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. The Company believes that it has appropriate support for the income tax positions it takes and expects to take on its tax returns, and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter.

For financial reporting purposes, income before income taxes includes the following components:

	Year ended December 31
	2014		2013		2012
United States	$	8,011	$	8,746	$	8,451
Canada	747		666		638
	$	8,758	$	9,412	$	9,089

- Definition

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.

+ References + Details