I recently attended a recent seminar by Leyton, a group that provides support for companies to take advantage of R&D Tax Credits. R&D tax credits were established by the Federal government to promote technical innovation and development within industries such as the food industry. The Federal R&D tax credit has a start up and small business provision which helps to offset FICA for annual payroll taxes. And some states also offer some form of the R&D Tax credit, so companies can actually get both Federal & State Tax credit
I came to see that many technical / food safety projects and programs that food companies are looking to implement could potentially be written off from taxes allowing companies to better afford and support these initiatives. For example, it may be possible to deduct expenditures as a company implements a third audit compliance system, develops a pathogen monitoring program, or installs IT-intensive traceability systems. Allowable expenditures could include staffing, consultants, equipment, and supplies.
There are certain criteria that must be met to qualify, but I think it is worth investigating if you or your company are considering or planning to improve your company’s capabilities. I was not aware of this potential tax deduction, and my guess, your financial people may also not be aware.
https://leyton.com/us/rd-tax-credit-opportunity-for-food-beverage/R&D Tax Credit for the Food & Beverage Industry
Tax savings for food & beverage companies!
Research & Development in the Food & Beverage industry
The food and beverage industry is facing a new demand for ingredients that are healthier, eco-friendly, and taste great! As consumer preferences are evolving, food and beverage companies are engaged in more Research & Development (R&D) activities than ever before.
Latest R&D trends in this sector include plant-based foods, waste reduction and shelf life extension, non-GMO products, green & innovative packaging, and more.
Most food & beverage companies are unaware that their day-to-day operations could qualify for the Research & Development (R&D) Tax Credit, which rewards eligible companies with dollar-for-dollar tax savings on their income and/or payroll tax liability.
Examples of R&D activity in Food & Beverage
- Improving texture or nutritional content of food product formulations
- Integrating a new ingredient to a recipe
- Improving machinery and equipment to ensure safe handling of food, improve productivity, and cost-efficiency
- Creating new packaging to improve shelf life, durability, and product integrity
- Developing innovative and/or environmentally friendly packaging material
- Incorporating new or improved equipment into production lines
- Experimental recipe development, including seasonal foods and drinks
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