Tax Incentive for Breweries: The R&D Tax Credit
A New Source of Capital to Grow Your Business
What Could Your Credit Look Like?
Multidisciplinary Team
Attorneys, Tax Professionals, & Engineers
$800M+
in Federal and State R&D Tax Credits
2,700 +
R&D Tax Credit Studies Completed
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01
What is the R&D Tax Credit?
- Tax incentive for breweries that rewards the development of new or improved products (recipes) and processes (brewing methods)
- You’re constantly trying to perfect your flavors and your process, and this Credit rewards your innovation
- In addition to the Federal credit, about 40 states have their own initiative
- This is a Credit, which is more powerful than a deduction. It doesn’t lower your taxable income like a deduction does. Instead, it directly reduces the amount of tax you owe, dollar-for-dollar
- The Credit can be captured retroactively and carried forward for up to 20 years – it can be a source of increased cash flow for the long-term
02
How Can Brewmasters Benefit from the R&D Tax Credit?
- Many of a brewmaster’s day to day activities are actually considered R&D Tax Credit
- Brewmasters can claim qualified expenses, including wages paid to in-house employees who perform qualified activities, and costs paid for supplies and materials
- For every qualifying dollar identified, brewmasters can receive up to $ 0.10 in benefit
- The resulting increased cash flow can be used to hire more staff, expand your brewery, or support future innovation
03
What Qualifying Activities do Brewmasters Perform?
Developing new or improved:
- Recipes (for flavor, texture, aroma, etc.)
- Formulations (low-calorie, ready-to-drink, low alcohol)
- Processes (heating techniques and enzymes for mashing, hops boiling, fermentation and yeast strains, ingredient-mixing, filtration, bottle conditioning, bottling, canning, packaging)
- Equipment design (stills, tanks, etc.)
- Package design (for shelf-stability, freshness, taste)
- Software applications
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