Alico, Inc. 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

Sep. 30, 2014

Income Taxes [Abstract]

Income Taxes

Note 13. Income Taxes

The provision for income tax (benefit) for the years ended September 30, 2014, 2013 and 2012 consists of the following:

(in thousands)	Fiscal Year Ended September 30,
	2014			2013		2012

Current:
Federal income tax	$	4,035		$	2,508	$	3,696
State income tax		543			458		1,298

Total current		4,578			2,966		4,994


Deferred:
Federal income tax		(590	)		7,921		5,617
State income tax		(255	)		1,142		362

Total deferred		(845	)		9,063		5,979

Total provision for income taxes	$	3,733		$	12,029	$	10,973

Income tax provision (benefit) attributable to income from continuing operations differed from the amount computed by applying the statutory federal income tax rate of 35% to pre-tax income as a result of the following:

(in thousands)	Fiscal Year Ended September 30,
	2014			2013			2012

Tax at the statutory federal rate	$	4,099		$	11,086		$	10,312
Increase (decrease) resulting from:
State income taxes, net of federal benefit		183			1,067			1,051
Federal impacts from IRS exam and tax return amendments		-			19			(444	)
Permanent and other reconciling items, net		(549	)		(143	)		54

Total provision for income taxes	$	3,733		$	12,029		$	10,973

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of September 30, 2014 and 2013 are presented below:

(in thousands)	September 30,
	2014			2013

Deferred tax assets:
Deferred retirement benefits	$	1,619		$	1,686
Inventories		95			144
Restricted stock compensation		-			31
Alico-Agri, Ltd. outside basis differences		3,196			3,196
Capital loss carry forward		10,492			10,502
Other		1,118			159

Total deferred tax assets		16,520			15,718

Deferred tax liabilities:
Revenue recognized from citrus and sugarcane		99			302
Property and Equipment		21,535			21,550
Investment in Magnolia		415			450
Other		210			-

Total deferred tax liabilities		22,259			22,302

Net deferred income tax (liability)	$	(5,739	)	$	(6,584	)

The Company applies a “more likely than not” threshold to the recognition and non-recognition of tax positions. A change in judgment related to prior years' tax positions is recognized in the quarter of such change. The Company had no reserve for uncertain tax positions at September 30, 2014 or September 30, 2013. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense and in the liability for uncertain tax positions.

On May 16, 2012, the Company reached a settlement with the IRS related to its examination of the returns of Alico, Agri-Insurance, Ltd., (a former subsidiary of the Company) and Alico-Agri for the tax years 2005 through 2007. As a result of the settlement, the Company paid Federal taxes of $613,000 and interest of $225,000. On October 9, 2012, the Company paid the State of Florida $318,000 for taxes and $5,000 for interest as a result of the IRS settlement. The Company accrued $149,000 at September 30, 2012, for additional state interest and penalties. The actual amount paid was $135,000 for state interest. No amount was due for state penalties, and the remaining accrual was reversed during the second quarter of fiscal year 2013.

- 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