Accelerate innovation in wine and grape‑based production. Wineries and vineyards across the U.S. are researching new grape varietals, experimenting with fermentation and ageing methods, refining bottling/packaging, and adopting sustainable viticulture practices. Many of these efforts qualify for the federal R&D Tax Credit under IRC §41, along with potential state incentives.
Examples of qualifying activities in the winery/vineyard sector
- Grape & Vine Trials Testing new varietals or clones, root‑stock trials, cover‑crop/soil management studies to alter grape chemistry
- Fermentation & Ageing Innovation Experimenting with wild or mixed‑culture fermentations, novel oak/barrel treatments, micro‑oxygenation systems, alternative ageing vessels (amphora, concrete, stainless steel)
- Bottling, Packaging & Closure Development Testing new closures (synthetic corks, screw‑caps with liner coatings), thin‑wall bottles, inert‑gas filling, smart labels, sustainable packaging options
- Shelf Life, Stability & Sensory Testing Conducting real‑time and accelerated ageing tests for aroma/flavour development, haze/clarity monitoring, oxidation/oxygen ingress studies
- Sustainability & Vineyard Management Projects Precision‑viticulture trials, water‑reuse systems, solar‑powered cellar operations, compost/spent‑grape‑skin reuse, energy‑efficient chillers or fermentation control
- Scale‑Up & Process Control Moving from pilot lot to full‑batch winery scale, integrating new process‑control sensors, advanced analytics for yield, fermentation kinetics, flavour consistency
What qualifies as R&D in wineries & vineyards?
To qualify, your activities must:
- Pursue a permitted purpose such as a new or improved grape varietal, wine process or packaging method (e.g., novel clone trial, micro‑oxygenation during ageing, biodegradable cork/cap)
- Address technical uncertainty about how to achieve the desired grape yield, flavour/aroma profile, fermentation behaviour, ageing outcome or packaging integrity
- Follow a process of experimentation — vineyard clone trials, fermentation parameter variations, barrel/aging studies, packaging trials
- Be technological in nature, grounded in biology (viticulture, yeast/micro‑organisms), chemistry (wine reactions, flavour compounds, ageing), engineering (tank/ageing system design), materials science (cork closures, bottle coatings)
Qualified Research Expenses (QREs)
Roles commonly involved in qualifying activities
- Viticulturists, vineyard managers leading vine/clone trials
- Enologists, fermentation scientists and lab technicians
- Packaging engineers and materials scientists
- Quality control/sensory testing personnel
- Sustainability project leads and process engineers
- External R&D partners and consultants
What does not qualify
- Routine grape‑harvest and vinification operations following established recipes with no experimentation
- Standard bottling without process or packaging innovation
- General marketing, brand development or sales activities unrelated to innovation
- Standard equipment purchases/installation without experimental or process optimisation purpose
Compliance and Documentation
Following the One Big Beautiful Bill Act (OBBBA) signed July 4, 2025, §174 now allows immediate expensing of domestic research expenses for tax years beginning on or after January 1, 2025. Taxpayers may also elect optional amortization under new §174A. Foreign research expenses must still be amortized over 15 years. This is separate from the §41 credit but impacts overall tax planning.
Maintain clear records of:
- Vineyard trial plans, clone/variant logs, soil/cover‑crop data, yield/chemistry results
- Fermentation and ageing batch logs: yeast/strain details, ageing vessel data, flavour/aroma metrics, oxygen ingress, clarity/haze data
- Packaging/bottling test logs: closure trials, fill‑line tests, sensor data, bottle/closure material trials
- Sustainability/energy‑use logs: water reuse systems, solar power data, composting, sensor/automation test results
- Employee time allocations tied to research, contractor invoices, software usage logs
Frequently Asked Questions
Yes. Wine producers and vineyard operations that conduct experimentation in varietals, fermentation/ageing methods, packaging/closure innovation or sustainability projects may qualify.
Wages of staff working on trials, supplies used in vineyard/fermentation/packaging experiments, software used in modelling/analytics, and a portion of contract research costs.
From boutique estates to larger vineyard‑wine producers, as long as you’re engaged in innovation of grape production, process, packaging, or sustainability you may be eligible.
Routine grape‑harvest, standard vinification without experimentation, standard bottling without process innovation, marketing or sales efforts, equipment installation without experimentation.
Savings depend on scope of innovation and documentation. Beverage‑industry sources suggest ~18% of eligible expenses may qualify.
Keep logs of vine/clone trials, fermentation/ageing batch data, packaging/closure test logs, sustainability trial data, employee time sheets, contractor invoices, software usage logs.
Next Steps
Use our calculator to estimate your potential federal and state benefits
Schedule a consultation to structure your row crop research activities
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