Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

v3.22.4
Income Taxes
 6 Months Ended
Nov. 30, 2022
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 six months ended November 30, 2022:

 

   

For the Three

Months Ended

November 30, 2022

    

For the Three

Months Ended

November 30, 2021

  

Loss before provision for income taxes

   $ (7,596,688

)

   $ (208,255

)

Provision for income taxes

   $ 516,691     $ 140,717  

Effective tax rate

     6.8

%

     67.5

%

 

   

For the Six

Months Ended

November 30, 2022

    

For the Six

Months Ended

November 30, 2021

  

Loss before provision for income taxes

   $ (8,409,728

)

   $ 547,684  

Provision for income taxes

   $ 1,035,776     $ 469,057  

Effective tax rate

     12.3

%

     85.6

%

 

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.