R&D Tax Credits for Food & Beverage Industry
What is the R&D Tax Credit for the Food & Beverage Industry?
The R&D tax credit for the Food & Beverage Industry is a unique tax incentive that benefits businesses that develop novel recipes and flavors, food science initiatives, or develop new products, processes, formulas, or techniques that improve functionality, reliability, quality, or performance. The R&D tax credit reduces your federal tax liability dollar-for-dollar and allows businesses an immediate source of liquid assets to get projects off to an immediate start. Businesses are also able to claim the R&D tax credits retroactively for up to 3 or 4 years for work that has already been completed.
Recent shifts in health and lifestyle trends have further spurred innovation within this sector, leading to the creation of inventive new products. The development of manufacturing processes, adherence to regulatory requirements, and the optimization of transportation logistics are all vital functions in this industry. These areas can lead to the design of equipment and processes that may qualify for the R&D credit.
Eligibility for this credit isn't restricted to large multinational food manufacturers alone; even smaller companies with a limited range of products or beverages can benefit. The R&D tax credit thus stands as an instrumental incentive for fostering innovation in the food and beverage industry.
Food and beverage manufacturers are often unaware of their eligibility for the R&D tax credit. Does your food & beverage company qualify for the R&D tax credit? The IRS has 4 guidelines in place to help businesses understand if they may qualify:
1. Does your business develop or improve upon products, businesses, or services?
2. Does your business systematically evaluate one or more alternatives during the process of experimentation?
3. Does your business attempt to solve a technical uncertainty?
4. Does your business fundamentally rely upon established principles of science?
If you answered yes to these 4 questions, your food and beverage business may be eligible to claim these beneficial R&D tax credits. Proveres is here to help you figure out the details.
What can the R&D Tax Credits do for the Food and Beverage Industry?
Reduce your payroll taxes
Use as non-dilutive funding
Carry your credit forward
How It Works
Proveres will work closely with your business to gain maximum tax credits each year by following these 5 steps:
Identify & Discover
Proveres provides a full analysis of your business and operations, and will help identify which projects and work your business does that can be claimed towards the R&D tax credit.
Proveres reviews expense-related data from your business and identifies what will qualify for the R&D tax credit.
Proveres gathers relevant information and documentation into the qualifications for each R&D tax credit claim.
Validate & Support
When the credits to be claimed have been calculated and validated, Proveres assists your business to facilitate a smooth tax filing process.
Annual Reviews to Maximize Credits
In addition to discovering existing R&D tax credits your Food & Beverage business qualifies for, Proveres also helps your business identify and implement procedural changes to unlock future R&D tax credits.
Some examples of food & beverage industry activities that may qualify for the R&D Tax credit include, but not limited to:
Development And Formulation Of New Food Products
Development Of New Beverage Formulations
Development And Formulation Of New Beers Or Brews
Design And Development Of New Or Improved Packaging Solutions
Improvement Of Fermentation Processes
Development And Enhancement Of New Flavors Including Sweeteners
Design And Development Of Manufacturing Or Logistical Equipment
Testing And Experimentation For Food Safety
Improving The Shelf Life Of Existing Products
Improving Flavor And Texture Profile Of Food Items
Developing new or improved food/beverage products to stay current with consumer trends (organic, gluten-free, easy preparation, etc.)
Experimenting with ingredients or packaging design to extend shelf life
Developing automated or optimized processing and packaging systems
Developing new or improved sanitization methods to enhance food safety and quality
Developing or improving software to help manage and facilitate services (online ordering, delivery status, etc.) or operations
Proveres has the experience, technology, and resources necessary to help make claiming tax credits as simple as possible. We specialize in helping businesses, including those in the food and beverage industry, identify and document qualified expenses and get maximum value from the R&D tax credit. Proveres also keeps pace with regulatory changes so we can support our clients in their efforts to comply with tax credit legislation affecting their Proveres services. To learn more about the R&D Tax Credit for Pharmaceuticals, and whether your business qualifies, please contact us