Larry, there is nothing in the 10k to suggest higher tax rates for next year, but I always use a pro forma tax rate of 35% (if domiciled in US and bulk of business is in the states).
In ANII's case, I think they still have a bit of a tax shield in front of them:
Deferred tax assets and liabilities consisted of the following net tax effects
of operating losses and temporary differences between the carrying amounts of
assets and liabilities for financial reporting and tax purposes at September 30,
2004:
F-12
ADVANCED NUTRACEUTICALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Current assets:
Loss carryforwards $ 2,420,000
Receivable allowance for doubtful accounts 112,000
Inventory valuation write-offs 4,000
Other 29,000
-----------
Deferred tax assets 2,565,000
Less valuation allowance (1,090,000)
-----------
Net current deferred tax assets 1,475,000
===========
Non-current assets:
Loss carryforwards 928,000
Fixed assets (37,000)
Less valuation allowance (341,000)
-----------
Net non-current deferred tax assets $ 550,000
===========
At September 30, 2004, the Company has a net operating loss carryforward of
approximately $5.5 million, which expires through 2022. Additionally, the
Company has obtained net operating losses of approximately $2.3 million, which
expire primarily in 2011 and are subject to annual usage limitations. The
Company also has capital loss carryforwards of approximately $1.2 million,
expiring through 2005, which may only be used to offset capital gains during the
carryforward period. As the Company is unable to determine that it is more
likely than not that the future taxable income of the Company will be sufficient
to utilize the operating loss carryforwards subject to the annual usage
limitations and the capital loss carryforwards, a valuation allowance has been
established against those assets. The net change during the year in the
valuation allowance was $3,016,000.
===================
-snipped from the 2004 10k for ANII.ob
I see these tax deferred assets as clearly being exhausted
at some point this year or next.....so for me, its a one-time benefit that
won't last. By FY06, they will probably be paying closer to
statutory rates if the next year goes pretty well.
Sorry for any confusion I may have caused, but I'm a stickler on this issue.
