R&D TAX CREDIT FOR THE APPAREL AND TEXTILES INDUSTRY

Many apparel and textile companies are not taking advantage of the R&D Tax Credit. Other companies are aware of the R&D Tax Credit, but fail to take full advantage due to misconceptions about the types of research and development activities that qualify. Companies in the apparel and textile industry often have technical design groups, sample makers, pattern makers, and sample testers whose activities may qualify for the R&D Tax Credit.  Your activities must be performed on US soil, and if they are, then your domestic design and development activities may make you eligible for the R&D tax credit.

In the apparel and textiles industry, R&D activities are evidenced in the design and development of new garments, shoes, accessories, textiles/fabrics, chemical and topical treatments, and embroidery techniques. Apparel companies at any stage in the development chain can have qualifying activities, from the textile mills, to the design houses, to the manufacturing plants. As not all qualifying R&D activities take place in traditional R&D departments, our apparel industry specialists can help identify those activities in your company that qualify.

If your company operates in the clothing, apparel, shoe, or textile industries, speak to our engineering experts to help you understand if your activities qualify for the R&D credit.

EXAMPLES OF APPAREL AND TEXTILE INNOVATIONS ELIGIBLE FOR R&D TAX INCENTIVES INCLUDE THE FOLLOWING:

• Designing new garments, shoes or apparel using new materials or techniques that have not been used previously
• Designing innovative fit and comfort techniques
• Generating prototypes and fit samples of new products for testing and validation
• Developing new woven, knit, or non-woven textiles
• Developing new or improved chemical or topical treatments
• Developing new or improved manufacturing processes
• Design and development of scaled up manufacturing processes

RESEARCH AND DEVELOPMENT TAX INCENTIVES FOR AUTOMOTIVE MANUFACTURING

The automotive industry is constantly pushing the boundaries of innovation.  Whether you are an OEM or a supplier, you are an excellent candidate for the R&D Tax Credit. Many companies in the automotive industry are not taking advantage of the R&D Tax Credit. Other companies are aware of the R&D Tax Credit, but fail to take full advantage due to misconceptions about the types of research and development activities that qualify. The fact is that a broad range of automotive industry practices will qualify for the R&D Tax Credit. Research and development is not limited to the work of dedicated scientists in white coats and Bunsen burners. For most manufacturers, qualifying activities happen in the plant or on the shop floor, and are often overlooked. Speak to our engineering experts to help you understand if your activities qualify for the R&D credit.

Examples of activities related to automotive manufacturing that are often qualifiers for R&D tax credits include:

• Introducing new or improved efficiencies to a wide range of manufacturing operations, from automated body assembly, to crash-testing prototypes, to eliminating material waste
• Designing and developing automotive parts and components, including airbags, transmissions, brakes, tires, windows, and electronic controls by engineers, tool makers, production supervisors, and operators
• Conducting first article test inspections and scrutinizing parts to maintain quality assurance using dimensional analysis, visual inspections, non-destructive testing, and other part-specific experiments
• Overcoming regulatory compliance challenges and exceeding safety requirements using instrumentation systems for dynamic impact testing, data acquisition systems and sensors for occupant safety testing, or in-dummy applications, for example
• Automating manufacturing operations with systems integration, control engineering, robotics, and more
• Prototyping new extrusion machinery, CNC machinery, and other heavy equipment
• Maintaining or upgrading existing devices
• Exploring new or improved material use, including experimentation with plastic injection molding, metal stamping, glass tempering, and rubber production
• Exercising environmental consideration to overall operations
• Developing software or designing unique control systems to facilitate operations

RESEARCH AND DEVELOPMENT TAX INCENTIVES FOR THE CHEMICAL INDUSTRY

The chemical and related industries are constantly pushing the boundaries of research and development. However, many companies are unaware of the full breadth and scope of the potential benefits that R&D tax credit can provide. Capturing the full extent of tax credits for R&D requires the exploration of multiple cost centers, not just a dedicated R&D group. In fact, not all qualifying R&D activities take place in traditional R&D laboratories.

In many companies, successful formula development, process development, pilot batch production, scale-up processes, method development, and analytical testing of experimental or improved products involves extensive experimentation and testing to ensure product quality and process efficiency. In addition, many of the individuals involved in these R&D activities may not belong to the laboratory or chemist groups, and consequently are easily overlooked for purposes of the R&D tax credit.

If your company operates in the pharmaceutical, fine chemicals, intermediates, excipients, solvents, analytical instrumentation, polymer, oil and gas, or laboratory equipment and glassware industry. The fact is that a broad range of your activities will qualify for the R&D Tax Credit. Speak to our engineering experts to help you understand if your activities qualify for the R&D credit.

Examples of chemistry innovations eligible for R&D tax incentives include the following:

• Designing new drugs, compounds, and intermediates
• Developing new applications for existing chemicals
• Conducting tests to satisfy foreign regulatory requirements
• Development of new testing methods/protocols
• Developing reagents and devices for testing
• Experimentation to increase product yield and decrease reaction times
• Improving a product’s shelf-life
• Developing new or improved techniques or formulae
• Developing new or improved feedstocks
• Developing new or improved manufacturing processes
• Designing and developing scaled-up manufacturing processes
• Generating pilot batches of new products for testing and validation
• Implementing automation processes or robotics
• Developing new or improved technologies

RESEARCH AND DEVELOPMENT TAX INCENTIVES FOR THE FEED MILL INDUSTRY

Many companies in the feed mill industry 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. Not all qualifying R&D activities take place in traditional R&D departments. 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.

Has your company introduced product line extensions recently? Have you modified product formulations and/or manufacturing processes to create feed products that 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. Speak to our engineering experts to help you understand if your activities qualify for the R&D credit.

Examples of feed mill activities eligible for R&D tax incentives include the following:

• Integrating operations with FDA, Animal Drug Availability Act and other regulations
• Improving mill processes to eliminate cross contamination of ruminant by-products into cattle feed
• Attempting to reduce rework of feed
• Maintaining formulation control
• Creating process improvements due to lean manufacturing or ISO-compliance or other production efficiency efforts
• Implementing good manufacturing practices for premix and medicated feed as outlined in codes and federal regulations
• Introducing changes to integrate horizontal or other mixers
• Making improvements to fat storage and handling
• Making changes to production to reduce regulated emissions
• Increasing absorption of feed
• Gaining efficiency in the pre-processing steps and the final feed manufacturing line
• Innovating the process of cleaning materials of sand, dust, and weeds
• Maintaining pellet quality such as changes to formulation, particle size, conditioning, die specifications, and pellet cooling
• Innovating with changes to mash, including ingredients, time spent in the conditioner, quantity and quality of steam, and adequacy of mixing
• Making changes to mill to handle both clean and infested grain simultaneously while maintaining identity of all feed grain and seed so segregation can be maintained
• Creating process changes to integrate screen, sieve-type or disc mill to remove weed seeds to meet a zero tolerance
• Improving contamination of weed seed
• Gaining efficiency in steam heating to assure a constant mass temperature
• Changing and spurring innovation aimed at:
• Increased bulk density
• Less bridging/hang-up in bins
• Less dust
• Reduced ingredient segregation
• Less feed waste
• Increased nutrient density
• Improved palatability
• Increased nutrient availability
• Decreased microbiological activity
• Integrating of post grinding systems
• Implementing wastewater treatment systems

RESEARCH AND DEVELOPMENT TAX INCENTIVES FOR THE FOUNDRIES INDUSTRY

Many companies in the foundry industry are not aware 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 that they are entitled to. 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, qualifying activities 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. Speak to our engineering experts to help you understand if your activities qualify for the R&D credit.

Examples of foundry innovations eligible for R&D tax incentives include:

• Developing a new or improved melting system
• Designing and developing new or improved metal forming process (hot or cold form)
• Developing improvements to the molding line
• Developing improvements to the pollution controls, including baghouse improvements
• Developing improvements to the furnace factory lining
• Testing and development of a new casting types
• Developing automation of furnace charging systems
• Developing improvements to the welding processes
• Developing techniques to eliminate coating waste
• Developing ways to recycle excess coating
• Developing new and improved heat treatment processes
• Conducting design validation testing to determine the optimal gating and risering system designs
• Implementation of automated processes
• Developing new or improved technologies
• Optimizing strength during the molding process
• Testing conducted for new composite materials (mold coatings, deoxidizing compounds, etc.)

RESEARCH AND DEVELOPMENT TAX INCENTIVES FOR THE MEDICAL EQUIPMENT INDUSTRY

Many companies in the medical equipment development industry are not aware that the government offers generous research and development (R&D) incentive programs. Even companies that are aware often fail to capture the full extent of R&D tax credits that they are entitled. For example, many businesses 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 medical equipment development companies, prototyping, process development, and testing occur in the plant or on the shop floor and thus may be overlooked for purposes of the R&D Tax Credit. Additionally, today’s medical device manufacturers may not realize that the traditional notions of R&D may cause them to limit qualified research expenditures to activities associated with new product and invention developments. However, in many cases, manufacturers spend a considerable amount of time and effort to develop or improve product designs that achieve optimized manufacturing process performance. Speak to our engineering experts to help you understand if your activities qualify for the R&D credit.

 

Examples of activities and innovations eligible for R&D tax incentives include the following

• Conducting new product development and design
• Developing engineering drawings and specifications
• Performing CAD modeling
• Developing second-generation or improved products
• Tooling and equipment fixture design and development
• Developing unique computer numerical control programs
• Designing innovative programmable logic controllers
• Developing equipment that satisfies increasing regulatory requirements
• Programming software source code for firmware
• Compiling and testing source code for firmware
• Conducting unit, integration, functional, and performance testing
• Conducting clinical tests to satisfy government regulatory requirements prior to commercialization
• Conducting tests to satisfy foreign regulatory requirements
• Development of new assays and testing methods/protocols
• Generating prototypes and first articles of new products for testing and validation
• Implementing automation processes or robotics
• Designing electrical equipment

RESEARCH AND DEVELOPMENT TAX INCENTIVES FOR THE OIL & GAS INDUSTRY

Companies operating in the oil and gas industry may not realize that many of their activities may entitle them to generous research and development (R&D) tax incentives. Oil and gas companies spend a considerable amount of time and effort developing more efficient and effective ways to explore for oil and gas, produce it, transport it, and refine it. They also invest in the development of cleaner or more efficient fuels and hundreds of other activities. This applies to the thousands of smaller companies that provide services and materials to the oil & gas industry, as well as the big oil companies. Many of these activities may not occur in traditional laboratories or settings usually thought of as “research.” However, these activities require time and money that may be captured as qualified research expenditures leading to significant tax benefits. If you think you have to be a large, public corporation developing new products and inventions to be conducting qualified activities as defined by the Internal Revenue Code, think again.

Speak to our engineering experts to help you understand if your activities qualify for the R&D credit.

 

Examples of innovations eligible for R&D tax incentives include the following:

• Designing offshore structure design with respect to:
  • Generator and compressor modules
  • Process modules
  • Quarters
  • Equipment skids
  • Jackets
  • Helidecks
• Developing and testing of plug and abandonment solutions
• Developing and testing of turnaround and shutdown services
• Creating plant design with respect to:
  • Pressurization
  • Safety
  • Chemical segregation
  • Environmental and pollution control systems
• Developing wastewater treatment solutions
• Refining issues
• Designing or improving drills
• Developing containment systems
• Testing fuel combustion
• Conducting environmental testing and remediation