Plant-based businesses meet consumer demand for meatless and meat-substitute food products through intensive research and development (R&D) efforts. If your company tests new recipe formulations, improves manufacturing processes to increase worker safety, or innovates with plant-based alternatives, it may be eligible to claim the R&D Tax Credit. Substantial tax savings are available for many businesses, and these savings can be reinvested to expand the workforce and improve infrastructure.
Employee wages, raw materials and supplies, cloud computing expenses, and third-party contractor costs associated with research and development 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:
- Creating and testing prototypes to validate new recipes/formulations
- Testing large batches of product to ensure reproducibility, and optimal storage, packaging, and shelf life
- Improving product ingredients to meet consumer needs (e.g. vegan, organic, all-natural)
- Improving color, texture, taste, juiciness, and aroma of plant-based meatless foods
- Innovating processes to accommodate unique raw materials and implementing new technologies (e.g. ingredients, software, robotics)
Do you have these job titles on your payroll, or do you hire third-party contractors to do these jobs?
- Compliance Managers
- Food Scientists
- Manufacturing Engineers
- Package Designers
- Packaging Engineers
- Packaging Specialists
- Process Engineers
- Test Chefs