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The R&D Tax Credit and the Agriculture Industry

  • February 20, 2023

Many individuals in the agriculture industry unknowingly engage in R&D activities daily, which could qualify for a significant tax credit. Fun fact; there are 2.1 million farms across the United States and about 914 million acres of land dedicated to farming.

The R&D Tax Credit rewards companies that pursue innovation with increasing investment. Incentivizes innovation and provides a dollar-for-dollar reduction on federal income tax liability. Companies can claim the R&D Tax Credit retroactively by filing amended returns for the past three years. In addition to the Federal R&D Tax Credit, approximately 36 states have separate R&D Tax Credit programs, also. 

Examples of Qualifying Activities:

  • Precision farming techniques to increase crop yield;
  • Flavor development/ingredient formulations for food products;
  • Evaluation or experimentation with new feeds and feeding techniques to improve or increase livestock production;
  • Improving manufacturing processes;
  • Creating new or improved packaging; and
  • Developing and testing new products to enhance food quality to satisfy specific requirements.

Qualifying Activities Must Meet a Four-Part Test:

To be a Qualifying Activity, the taxpayer must meet a threshold test known as the “Four-Part Test” under the Internal Revenue Code.

Since 1985, ABGi USA has been providing the highest level of service for the R&D Tax Credit for our clients. By using our unique Business Component Approach with an established nexus, ABGi maximizes the R&D Tax Credit while at the same time providing superior documentation to ensure that the claim stands up to the highest level of IRS scrutiny.

ABGi USA’s team of experts comes from technical backgrounds to work with your organization as efficiently as possible. An industry-specific program manager will always be assigned to you to minimize your staff’s involvement and ensure the smoothest experience.

Reach out today for a complimentary consultation. 

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