Sowing Seeds of Innovation: R&D Tax Credits for Agribusiness
In the modern world, agriculture and technology are intertwined, creating a dynamic environment ripe for innovation. If you're in the agriculture industry, you're likely engaged in activities that could qualify for substantial federal and state tax benefits in the form of research and development (R&D) tax credits.
Qualifying Agricultural Expenses for R&D Tax Credits
The first step to claiming R&D tax credits is understanding what expenses qualify. In the agriculture industry, these can include:
- Employee wages: W-2 wages for employees involved in R&D related activities
- Supplies: The cost of supplies consumed or used in the R&D process
- Contractor expenses: The cost of contractors used in support of R&D-related activities
Examples of Qualifying Activities in the Agriculture Industry
The agriculture industry is a broad field with a multitude of activities that can qualify for R&D tax credits. Here are some examples:
1. Developing new or improved:
- Storage techniques to enhance product longevity
- Conveyance systems to improve the efficiency of product transportation
- Products or processes to maximize yield
- Software to streamline agricultural operations
- Irrigation technologies to optimize water usage
- Techniques or equipment to minimize environmental impact
- Methods of protecting crops from disease
- Disease-resistant crops or livestock
- Ways to prevent or control disease or insect pests
- Gene transfer technologies, such as the DNA engineering of high-end bull semen
- Automated processes to increase efficiency
- Innovative products or processes that advance the industry
- Livestock feeds or feeding techniques to improve animal health and growth
- New breeding techniques to enhance livestock or crop quality
- New cultivation techniques to improve crop yield
2. Testing:
- New or improved planting or harvesting techniques
- New or improved chemical additives or fertilizers
- New feeds or feeding techniques to improve livestock health or growth
- New soil blends, introducing new pH levels, mineral content or nutrient density
- New techniques or products to prevent disease or pest damage
3. In addition:
- Hybridizing or developing new strains of crops, plants or livestock
- Implementing precision farming techniques to increase yield and/or production efficiency
- Experimenting with new or different fertilizers
- Evaluating and implementing new techniques to increase yields
- Improving harvesting techniques
- Implementing new equipment to improve harvest cycle times
- Optimizing the treatment and management of farm wastes in an energy-efficient manner
- Designing and implementing biosecurity practices via facility cleaning and disinfection
Getting an R&D Tax Credit Analysis to see if you qualify is the first step!
eBook: The Architect's Guide to R&D Tax Credits
This comprehensive e-book is designed to help you recognize which of your activities qualify for R&D tax credits!