INCOME TAXES |
9 Months Ended |
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Sep. 30, 2023 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES |
12. INCOME TAXES
The income tax expense for the three months ended September 30, 2023 was approximately $57,000 comprised of a current tax expense of $30,000, a deferred tax expense of $17,000 and a foreign tax of $10,000. The income tax expense for the nine months ended September 30, 2023 was approximately $204,000 comprised of a current tax expense of $94,000, a deferred tax expense of $81,000 and a foreign tax of $29,000.
The income tax expense for the three months ended September 30, 2022 was approximately $55,000 comprised of a current tax expense of $20,000 and a deferred tax expense of $35,000. The income tax expense for the nine months ended September 30, 2022 was approximately $144,000 comprised of a current tax expense of $82,000 and a deferred tax expense of $62,000.
The current income tax provision for the nine months ended September 30, 2023 and 2022 primarily relates to state minimum taxes and foreign income taxes. The deferred tax provision for the three and nine months ended September 30, 2023 and 2022 relates to the book and tax difference of amortization on indefinite-lived intangibles, primarily goodwill. To the extent allowable, the federal deferred tax provision has been offset by the indefinite life net operating loss.
During 2022, it was determined that for the states that follow the federal rules regarding indefinite life net operating losses, the offset to the state deferred tax liability was approximately $45,000. This amount was recorded as a deferred tax benefit during the second quarter of 2022. Subsequently, the state deferred tax liability has been offset against the state net operating loss to the extent allowable.
The Company has incurred cumulative losses, which make realization of a deferred tax asset difficult to support in accordance with ASC 740. Accordingly, a valuation allowance has been recorded against the federal and state deferred tax assets as of September 30, 2023 and December 31, 2022.
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