Food & Consumer Packaged Goods
Research and Development Tax Incentives for the Food & Consumer Packaged Goods Industry
Many companies in the food manufacturing and processing industries are unaware that the government offers generous research and development (R&D) incentive programs. Even those that are aware often fail to capture the full extent of R&D tax credits to which they are entitled. For example, many companies may be capturing relevant expenses from their R&D cost centers, but not all qualifying R&D activities take place in traditional R&D departments. In many companies, prototyping, process development, and testing happen in the plant or on the shop floor, and thus may be overlooked for purposes of the R&D tax credit. If you think you have to have a PhD and a state-of-the-art laboratory to be conducting qualified activities as defined by the Internal Revenue Code, think again.
Scientists, nutritionists, dietitians, technologists, and process engineers that work for food manufacturing and processing companies have the responsibility and challenge of developing a wide variety of food, beverage, and consumer products and processes to satisfy continuously evolving customer expectations and preferences. These efforts to create better tasting products or more nutritious products typically involve extensive experimentation and testing of new formulations, recipes, process parameters, and packaging methods. Has your company introduced product line extensions recently? Have you modified product formulations and/or manufacturing processes to create food products that taste better, are more nutritious, have better consistency, or have longer shelf lives? If the answer is yes, then there is a strong chance that your company could benefit from an R&D Tax Credit study. Let alliantgroup’s food science experts help you claim the credits that you deserve.
Examples of Food Science Innovations Eligible for R&D Tax Incentives Include the Following:
- Developing recipe formulations for new food products and flavorings
- Improving existing food product formulations to extend product shelf life
- Developing new or improved agricultural or chemical materials that go into the food products
- Improving existing food product formulations to enhance sensory qualities including flavor, appearance, and texture
- Improving existing food product formulations to achieve specified nutritional requirements, including sodium content and caloric value
- Improving existing food product formulations to achieve specified analytical requirements, including those related to pH level, brix level, acid content, and product viscosity
- Developing new production process specifications and techniques for the production of new food products, including mixing times, batching sequences, and cooking temperatures and durations
- Improving existing production processes to improve efficiency or reduce manpower, lead time, and waste
- Developing new machinery and equipment for the production and testing of food products
- Developing new packaging designs to provide enhanced functionality or increased product shelf life
- Producing prototype product samples for testing and validation of new recipe formulations
- Testing prototype samples for analytical and microbiological qualities
- Conducting sensory evaluations of prototype samples
alliantgroup’s Food Science Specialization Team
In order to better serve food manufacturing and processing firms, alliantgroup has developed an Industry Specialization Program that focuses on the qualification and quantification of R&D tax benefits for companies operating in the diverse areas that comprise food sciences. This group employs individuals with extensive experience in food science-related industries. alliantgroup has qualified and quantified credits for corporations ranging from small private food processing firms to large, multi-national food manufacturers.
Manufacturing R&D Tax Credit Whitepaper
Download our free Manufacturing R&D Tax Credit white paper to better understand recent regulatory changes and IRS requirements.
