| Income Tax Disclosure [Text Block] | 12. INCOME TAXES The provision for income taxes
for fiscal years 2023, 2022, and 2021 consist of the following (amounts in thousands):
2023 2022 2021
Federal:
Current $ 4,580 $ 4,485 $ 4,450
Deferred 14,102 2,925 12,064
Total 18,682 7,410 16,514
State and Local:
Current 3,377 4,167 3,098
Deferred 501 (2,035 ) (581 )
Total 3,878 2,132 2,517
Provision for income taxes $ 22,560 $ 9,542 $ 19,031 The tax effects of significant
temporary differences representing deferred tax assets and liabilities are as follows (amounts in thousands):
January 31,
2024 2023
Assets:
General business credit carryforward $ 12,296 $ 26,061
Accrued liabilities 611 627
State net operating loss carryforward 202 244
Other items 288 240
Valuation allowance (160 ) (192 )
Total 13,237 26,980
Liabilities:
Basis in pass through entities, including depreciation (6,334 ) (5,821 )
Other (664 ) (292 )
Total (6,998 ) (6,113 )
Net deferred tax asset $ 6,239 $ 20,867 The net deferred tax asset is reported on the accompanying Consolidated
Balance Sheets based on net position by tax jurisdiction, with federal positions recorded as net assets and state positions recorded as
net liabilities. At January 31, 2024 and 2023, respectively, approximately $7.8 million and $22.0 million are recorded as assets on the
Consolidated Balance Sheets within “Other assets” and $1.6 million and $1.1 million are recorded as liabilities on the accompanying
Consolidated Balance Sheets within “Deferred taxes”. The Company has a general business
credit carryforward of approximately $12.3 million and $26.1 million at January 31, 2024 and 2023, respectively. The Company can
carry these credits forward for up to twenty years. The carryforward period begins to expire in fiscal year 2039. The Company has a valuation allowance of approximately
$160,000 and $192,000 at January 31, 2024 and 2023, respectively, related to state net operating loss carryforwards. The Company
decreased the valuation allowance by $32,000 in fiscal year 2023. These adjustments to the valuation allowance are a result of
estimates of realizing certain future state tax benefits. The Company assessed all available positive and
negative evidence to determine whether it expects sufficient future taxable income will be generated to allow for the realization
of existing federal deferred tax assets. There is sufficient objectively verifiable income for management to conclude that it is
more likely than not that the Company will utilize available federal deferred tax assets prior to their expiration. Through its refined coal operation, the Company
earned production tax credits pursuant to IRC Section 45. The Company ceased operation of its refined coal business on November
18, 2021. The credits can be used to reduce future income tax liabilities for up to 20 years. These credits increased the income
tax benefit from discontinued operations by approximately $11.3 million during fiscal year 2021. During fiscal years 2022 and
2021, the Company recognized an income tax benefit (provision) for federal and state research and experimentation credits (net
of uncertain tax position expense) of approximately $0.4 million and $(3.0) million, respectively. The credits can be used to reduce
future income tax liabilities for up to 20 years. The Company paid income taxes
of approximately $12,730,000, $2,795,000, and $7,239,0000 in fiscal years 2023, 2022, and 2021, respectively. The Company did not
receive any refunds in fiscal years 2023, 2022 and 2021. Reconciliations of the federal
statutory tax and the Company’s income tax expense for fiscal years 2023, 2022, and 2021 are as follows (amounts in thousands):
2023 2022 2021
Federal income tax at statutory rate $ 20,682 $ 9,971 $ 15,926
State and local taxes, net of federal tax benefit 3,299 1,725 2,396
Research and experimentation credits - (2,542 ) (5,184 )
Nondeductibe compensation expense 2,150 508 -
Uncertain tax positions (98 ) 2,281 8,340
Noncontrolling interest (3,650 ) (2,523 ) (2,231 )
Other 177 122 (216 )
Total $ 22,560 $ 9,542 $ 19,031 The Company files a U.S. federal
income tax return and income tax returns in various states. In general, the Company is no longer subject to U.S. federal, state
or local income tax examinations by tax authorities for fiscal years ended January 31, 2014 and prior. The Company is currently
undergoing a federal income tax examination for the years ended January 31, 2015 through January 31, 2022 related to tax credits
claimed on returns during those years. The Company applies the provisions
of ASC 740-10-25-5 for uncertain tax positions. As of January 31, 2024, total unrecognized tax benefits were approximately $18,895,000,
and accrued penalties and interest were approximately $70,000. If the Company were to prevail on all unrecognized tax benefits
recorded, the provision for income taxes would be reduced by approximately $18,812,000. In addition, the impact of penalties and
interest would also benefit the effective tax rate. Interest and penalties associated with unrecognized tax benefits are recorded
within income tax expense. On a quarterly and annual basis,
the Company accrues for the effects of open uncertain tax positions and the related potential penalties and interest. It is reasonably
possible that the amount of the unrecognized tax benefit with respect to certain unrecognized tax positions will increase or decrease
during the next 12 months; however, the Company does not expect the change to have a material effect on results of operations or
financial position. The Company accounts for uncertainty in income taxes by determining whether it is more likely than not the position will be sustained on audit, including resolution of any related tax audits. A reconciliation of the beginning and ending amount of unrecognized tax benefits, including interest and penalties,
is as follows (amounts in thousands):
Fiscal Year
2023 2022
Unrecognized tax benefits, beginning of year $ 19,088 $ 16,781
Changes for tax positions for prior years 45 165
Changes for tax positions for current year (168 ) 2,142
Unrecognized tax benefits, end of year $ 18,965 $ 19,088 At January 31, 2024 and 2023, approximately $16.4 million of the unrecognized
tax benefits balance was recorded on the accompanying Consolidated Balance Sheets within “Other assets” and $0.6 million was
recorded within “Other long-term liabilities”. At January 31, 2024 and 2023, respectively, approximately $2.0 million and
$2.1 million of the unrecognized tax benefits balance was recorded on the accompanying Consolidated Balance Sheets within “Refundable
income taxes”. |
