Plastics. Pharmaceuticals. Fuel Additives. Shampoos and Conditioners. All of these are made possible through technological advancements by the chemical industry. While scientists are busy mixing complex formulas to create new and innovative products, the equipment used to make those unique compounds are often overlooked. They are the unsung heroes that make these innovations possible.
Equipment manufacturers contributing to the chemical industry may not realize that the Research and Development (“R&D”) tax credit is available to inject additional capital back into their businesses. Many of these companies view their day-to-day activities as merely conduct in advance of the normal course of business, when in reality, the complex science and engineering required to produce reliable equipment often qualifies for R&D tax credits. There are a variety of factors that these companies constantly evaluate, including: the corrosive nature of the chemicals, the amount of pressure and correct temperatures necessary to create specific compounds, system flexibility to use a myriad of different chemicals, as well as the resulting chemical reaction. Additionally, the companies must also consider space constraints for where the equipment is located, the safety of the equipment operator, and methods for limiting chemical contamination when determining the appropriate design for the equipment. When viewed in this light, it’s clear that these manufacturers are undergoing as much R&D as those scientists who use the equipment.
alliantgroup has seen great success identifying R&D tax credits for taxpayers that produce custom mechanical systems for the chemical industry. In a recent single year credit study, alliantgroup successfully identified over $200,000 in R&D tax credits for a manufacturer that produced specialized equipment capable of processing toxic and corrosive chemicals. alliantgroup determined that the company had qualified expenditures in employee activities, supply costs, and contractor expenses, all of which contributed to ensuring that the customized equipment effectively processed these corrosive chemical mixtures and compounds, while also complying with industry regulations and safety standards.
So how would a company go about determining whether or not they qualify for the R&D credit? For businesses contributing to the chemical industry, the solution is simple; alliantgroup stands ready to help these companies identify qualified activities so that they may reap the benefits of the R&D credit. Now that certainly is a winning formula any business can get behind!
Contact us today to learn how your business can benefit from alliantgroup’s tax consulting services.