For the past 30 years, large manufacturers, pharmaceutical companies and software developers have benefitted greatly from the Research and Experimentation Tax Credit. Recent legislation has made it accessible to contractors, architects, engineers and smaller manufacturers, and pending legislation would make the credit permanent.
If research and innovation are part of your culture, it is worth your while to consider the Research and Experimentation (R&E) Tax Credit. Barnes Dennig representatives are available to discuss how it could be applied to your business.
The credit was created in 1981 as a temporary measure to jump-start the manufacturing industry, and it has been extended numerous times; it is currently in place through the end of 2011. Legislative changes over the years have allowed companies to claim the credit for a wider variety of activities, and the Alternative Minimum Tax “patch” that is in place for 2011 makes the R&E Credit valuable to middle-market companies that would not have benefitted in the past.
A contractor could quality for the credit if it has invested time, money or other resources on experimentation to improve a product or process. That could mean designing a unique HVAC system for a new building, testing new materials or streamlining an internal process – things you might shrug off as “just part of the job.”
The Obama administration has proposed expanding and simplifying the R&E Credit and making it permanent. Senators Max Baucus (D-Montana) and Orrin Hatch (R-Utah) recently introduced a bill that would raise the value of the credit even more and make it permanent. The US Treasury Department estimated that a simpler, permanent R&E credit would provide more than $100 billion in credits over the next 10 years and lead to at least an additional $100 billion in private-sector spending on research.
For more information on the R&E credit and how it might be applied to your business, contact a Barnes Dennig representative at (513) 241-8313.