The agriculture industry is highly competitive and requires significant investments in research and development (R&D). If your farm deploys precision farming techniques, tests soils for crop health and expansion, or implements improvements in time-to-market, it may be eligible for significant tax savings. Farms that take advantage of the R&D Tax Credit at the federal and state levels can recoup a portion of their R&D expenditures, and reinvest much-needed capital into the business.
Employee wages, raw materials and supplies, and third-party contractor costs associated with R&D activities are considered qualified research expenses (QREs). Companies can receive refunds of up to 22% of total QREs through federal and state tax credits, depending on the state in which your business operates.
Examples of qualifying activities:
- Developing new or improved food transportation processes (e.g. trucking, refrigeration)
- Testing and implementing techniques to prevent damage from diseases and pests
- Developing techniques or equipment to maintain compliance with environmental regulations
- Improving farm facilities to ensure health and safety for workers, consultants, and scientists
- Designing farm waste management systems with an energy-efficient approach or process (e.g. methane recapture)
Do you have these job titles on your payroll, or do you hire third-party contractors to do these jobs?
- Agricultural Engineers
- Crop Managers
- Farm Managers
- Plant / Soil Scientists