Posted by on 08.09.23

The packaging industry is involved in almost every aspect of products manufactured throughout the world. Package designers seek ways to advance the quality, functionality and safety of their products all within compliance of regulations and guidelines. 

Over the years, there have been significant updates and breakthroughs in the packaging industry to make package designs more desirable for customers, as well as more environmentally friendly.The packaging industrycontinues to make progress in terms of sustainable packaging options available to manufacturers across many industries. These packaging innovations could change how we shop, all while making the world a cleaner place by using less resources and lowering the amount of waste. Many package designers would be surprised to discover that many of the activities they already are conducting to better the industry qualify for valuable tax credits.

Often, R&D credits are mistakenly assumed to apply only to the creation of a new product, but package designs for the products can also qualify for tax credits in a number of ways. Consider the following examples of activities that may qualify as research; creating new packaging to improve shelf life, durability, reducing materials or using more environmentally friendly materials in packaging, or introducing new or alternative materials to improve packaging. The development of a new and improved package design that can provide a longer product life could have a significant impact on distribution and inventory control for businesses as well as appealing to consumers at home. 

Key projects and activities that may qualify for R&D tax credits;

• Developing new materials to meet environmental requirements
• Developing ways of using natural plant life as a source of packaging
• Improving the efficiency of product packaging
• Reducing the amount of waste for raw materials during production
• Enhancing the speed of packaging operations
• Improving existing packaging processes to increase automation and streamline operations
• Improving processes to reduce pollution and greenhouse gas emissions
• Developing new package designs that extend the shelf life of a product
• Developing new package designs that incorporate greater recycled and recyclable materials
• Refining quality assurance procedures
• Improve design, prototype, test new packaging using 3D CAD modeling, 3D printing, and prototyping
• Collaborating with internal partners (for example: marketing, global design, trade, legal, regulatory, regional packaging teams, engineering and procurement)
• Collaborating with external partners (for example: suppliers, tool makers, design agencies, test houses, universities and creative agencies)
• Developing new technologies, materials and processes
• Arrange consumer testing groups to ensure delivery on the Consumer needs

Research and development tax credits target companies that are developing new or improved products or processes. First enacted into law in 1981 as a way to keep companies in the United States competitive in the global market, the R&D tax credit is one of the most lucrative tax credits available to taxpaying employers and shareholders. 

Request a free assessment to determine qualifying R&D tax credit eligibility.

Tax Point Advisors currently partners with some of the most forward-thinking companies in the United States, and we’re eagerly looking to help additional companies take full advantage of the available credits in the most effective way. 

Tax Point Advisors provides R&D tax credit study services and other specialty tax services to CPA firms and their clients throughout the U.S. To learn more about R&D tax credits from the experts at Tax Point Advisors, please call us at (800) 260-4138 or please leave us a message below.