Since most businesses are routinely involved in common activities to develop or refine their products and processes to stay competitive, it may be worth conducting a R&D tax credit study to determine if there are qualifying activities taking place. Additionally, any company that owns its own building(s) can likely benefit from a cost segregation study.
Tri-Merit makes it easy for companies to recognize opportunities at the federal and state level. Our team of engineers, attorneys and CPAs have worked in numerous industries to find qualifying business activity relative to the R&D tax credit and cost segregation.
Research and Development Tax Credit
An Eligible Small Business (ESB) with $50M or less in average gross receipts in the past three years may offset the Alternative Minimum Tax (AMT). This makes the R&D credit beneficial to many companies that were previously limited by AMT. A Qualified Small Business (QSB) with less than $5M in gross receipts may offset a portion of their payroll taxes, benefitting many new businesses who were previously not able to receive a benefit.
Many industries include the types of functions that may qualify for an R&D tax credit claim:
- Agricultural Sciences
- Aerospace
- Architecture
- Automation
- Automotive (OEM and suppliers)
- Biosciences
- Breweries
- Chemical
- Computer Hardware
- Contract Manufacturing
- Electronics
- Engineering
- Fabrication
- Food and Beverage
- Foundry
- Injection Molding
- Manufacturing
- Medical Device
- Nanotechnology
- Oil & Gas
- Packaging
- Pharmaceuticals
- Plastics
- Robotics
- Software
- Tool and Die
Cost Segregation
While any business that has built or is about to build or acquire new construction can be a good candidate for cost segregation, if any of the following apply, a cost segregation study would likely result in significant savings on depreciation in the current tax year and future years to come – no amendments required:
- Manufacturing and industrial plants
- Health and long-term care facilities
- Financial institutions
- Automobile dealerships
- Distribution centers and warehouses
- Office buildings
- Restaurants and hotels
- Retail and convenience stores
- Shopping centers
- Apartment buildings