R&D activity in the chemical industry sector either involves new production processes or new compositions of matter (product development). Research objectives generally include, but are not limited to, higher performing products, sustainability features, alterations aimed at regulatory compliance, and cost reductions.
TPA is asking all privately held clients and trusted advisor partners to take a fresh look at the Interest Charge Domestic International Sales Corporation (“IC-DISC”) tax incentive. Even if you are already using the IC-DISC, TPA may be able to help you increase your savings. The incentive permanently reduces the federal tax rate for owners of privately held companies on certain income. The immediate and permanent tax rate decrease on this income is as high as 17%! (40.8% vs. 23.8%). Achieving this arbitrage does not require any change in business operations whatsoever. The IC-DISC is recommended by the U.S Department of Commerce.
Article from taxnotes.com
WASHINGTON – Ways and Means Republican Rep. Jackie Walorski (R-IN) introduced H.R. 8253, the Fostering Innovation and Research to Strengthen Tomorrow (FIRST) Act, which would double the research and development (R&D) tax credit and allow more small business startups to access this credit.
Small Business Week, which runs now through May 6, is an excellent time for Tax Point Advisors to remind small businesses of an outstanding opportunity to claim valuable tax credits for eligible R&D activities.
Does your dairy company undertake activity intended to develop a new or improved product or process for yourself or your customer?
At first glance, it may seem unlikely that the poultry industry would have much in common with federal and state research and development (R&D) tax credits. After all, for years, R&D tax credits have been associated with large manufacturing, high-tech and medical companies. However, businesses engaged in the poultry industry are ripe with qualifying opportunities for valuable tax credits associated with the activities they conduct for improved products and/or processes.
Consider making the R&D tax credit part of your long-term strategic planning and make sure you’re not leaving money you’ve earned on the table.
With many American businesses around the country struggling due to the COVID-19 pandemic, the U.S. government responded by passing multiple stimulus packages and tax credits throughout 2020 and now into 2021. One essential tax credit businesses should be aware of is the Employee Retention Tax Credit (ERTC) which has now been extended through the first three quarters or 2021 at a potential value of up to $26,000 per employee.
Rhode Island enjoys a wealth of strategic advantages for businesses engaged in research activities of all sizes and scopes. Its centralized presence in the Northeast U.S. provides easy access to key centers of national and international commerce. It enjoys the Northeast’s lowest corporate tax rate. Its renowned academic institutions are havens of innovation and serve as incubators for many innovative startups.
There is one thing that may hold some business owners back—the fear of being audited by the IRS. While only a small percentage of businesses that apply for R&D credits actually get audited, it is important they maintain precise documentation of R&D activities that align with qualification criteria so that if an audit is required, they are fully prepared.
