Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

v3.21.2
Income Taxes
3 Months Ended
Aug. 31, 2021
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]

Note 19 – Income Taxes

 

The following table summarizes the Company’s income tax accrued for the three months ended August 31, 2021:

 

   

August 31,

2021

 

Income before provision for income taxes

  $ 755,939  

Provision for income taxes

  $ 328,340  

Effective tax rate

    43.4

%

 

Due to the accrual of taxes related to Section 280E of the Internal Revenue Code, as amended, the Company has an uncertain tax accrual that is currently being expensed as a change in estimate. The Company has net operating losses that it believes are available to it to offset this expense; however, there can be no assurance under current interpretations of tax laws for cannabis companies that the Company will be allowed to use these net operating losses to offset Section 280E tax expenses.