Annual report pursuant to section 13 and 15(d)

Income Taxes

v2.4.0.8
Income Taxes
12 Months Ended
Sep. 30, 2013
Income Taxes [Abstract]  
Income Taxes

Note 12. Income Taxes

 

The provision for income taxes (benefit) for the years ended September 30, 2013, 2012 and 2011 consists of the following:

 

(in thousands)   Fiscal Year Ended September 30,
    2013   2012   2011
             
Current:                        
Federal income tax   $ 2,508     $ 3,696     $ 4,141  
State income tax     458       1,298       726  
                         
Total current     2,966       4,994       4,867  
                         
                         
Deferred:                        
Federal income tax     7,921       5,617       608  
State income tax     1,142       362       (45 )
                         
Total deferred     9,063       5,979       563  
                         
Total provision for income taxes   $ 12,029     $ 10,973     $ 5,430  

 

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,
    2013   2012   2011
             
Tax at the statutory federal rate   $ 11,086     $ 10,312     $ 4,259  
Increase (decrease) resulting from:                        
State income taxes, net of federal benefit     1,067       1,051       460  
Federal impacts from IRS exam and tax return amendments     19       (444 )     713  
Deferred rate adjustment     -       (313 )     -  
Permanent and other reconciling items, net     (143 )     367       (2 )
                         
Total provision for income taxes   $ 12,029     $ 10,973     $ 5,430  

 

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, 2013 and 2012 are presented below:

 

(in thousands)   September 30,
    2013   2012
         
Deferred tax assets:                
Deferred retirement benefits   $ 1,686     $ 1,581  
Inventories     144       144  
Restricted stock compensation     31       -  
Alico-Agri, Ltd. outside basis differences     3,196       20,857  
Capital loss carry forward     10,502       1,037  
Other     159       357  
                 
Total deferred tax assets     15,718       23,976  
                 
Deferred tax liabilities:                
Revenue recognized from citrus and sugarcane     302       286  
Property and Equipment     21,550       20,826  
Investment in Magnolia     450       385  
                 
Total deferred tax liabilities     22,302       21,497  
                 
Net deferred income tax (liability) asset   $ (6,584 )   $ 2,479  

 

 

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, 2013 or September 30, 2012. 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.