Brewing companies perform daily research, not as a separate task, but as everyday improvement activity for their products. Thus, making this industry a strong contender for the Research and Development (R&D) Tax Credit. Many companies are unaware of this government incentive since there is a misconception that employees need to have a PhD or the research needs to be conducted in a state-of-the-art laboratory. Great news though, most of the products’ developments, improvements and testing are considered qualified research activities (QRAs) and thus fulfill the IRS Four-Part Test requirements which allows a company to claim the incentive.
The following activities conducted by brewing companies are considered qualified research activities:
- developing fermentation processes;
- filtration methodologies;
- bottling and canning processes;
- ingredient processing techniques;
- brewing and bottling equipment;
- preservative chemicals.
Testing products to ensure consistency and shelf life are other brewery innovations that a company can claim for the Research and Development Tax Credit. Failures in the design, development or testing phase can also be considered QRAs, regardless of being cataloged as “failed projects”. The IRS “failed project” provision is essential for companies in the brewery industry who constantly test products and some of them don’t meet the quality assurance threshold.
If your company conducts the activities explained above there is a strong likelihood that your company can take advantage of the Research and Development Tax Credit. Visit the Indago website or email us at firstname.lastname@example.org for more information on how we can increase your company’s market value and boost its bottom line through the Research and Development Tax Credit.