Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

v3.23.1
Income Taxes
 9 Months Ended
Feb. 28, 2023
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]

Note 20 – Income Taxes

 

The following table summarizes the Company’s income tax accrued for the three and nine months ended February 28, 2023:

 

   

For the Three

Months Ended

February 28, 2023

    

For the Three

Months Ended

February 28, 2022

  

Loss before provision for income taxes

   $ (513,654

)

   $ (673,031

)

Provision for income taxes

   $ (516,252

)

   $ (324,265

)

Effective tax rate

     100.5

%

     48.2

%

 

   

For the Nine

Months Ended

February 28, 2023

    

For the Nine

Months Ended

February 28, 2022

  

Loss before provision for income taxes

   $ (9,015,370

)

   $ (125,347

)

Provision for income taxes

   $ (1,552,028

)

   $ (793,322

)

Effective tax rate

     17.2

%

     632.1

%

 

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.