|12 Months Ended|
Jun. 30, 2018
|Income Tax Disclosure [Abstract]|
|Income Tax Disclosure [Text Block]||
Note 9 Income Taxes
Taxing jurisdictions related to income taxes are the Unites States Federal Government, the State of Colorado and the State of California. The provision for income taxes is as follows:
Deferred taxes are a result of differences between income tax accounting and GAAP with respect to income and expenses. The following is a summary of the components of deferred taxes recognized in the financial statements as of June 30, 2018 and 2017:
The valuation allowance was established because the Company had not reported earnings in order to support the recognition of the deferred tax asset. The Company has net operating loss carryforwards of approximately $60,700,000 for federal and state income tax purposes. Federal and state net operating loss carryforwards, to the extent not used, will expire starting in 2031. Under provisions of the Internal Revenue Code, substantial changes in the Company’s ownership may result in limitations on the amount of net operating loss carryforwards that can be utilized in future years. As of June 30, 2018, approximately $6,281,000 of the net operating loss carryforwards are subject to IRS limitations. The Company is no longer subject to income tax examinations for federal income taxes before 2013 and for Colorado before 2012.
The Tax Cuts and Jobs Act of 2017 (the “Act”) was enacted on December 22, 2017 and significantly revises tax law. The Act reduces the U.S. federal corporate tax rate from 35% to 21%, effective requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously deferred and includes a variety of other changes. Consequently, we recorded a provisional decrease of approximately $8.9 million. This reduction way fully offset by a corresponding change in the valuation allowance recorded against the deferred tax assets.
The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate of 27.5% to pretax income for the following periods, due to the following:
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.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef