How The R&D Tax Credit Applies To The Wine Industry

In our talks with wineries across the country, we find that much of what goes into the daily operations of a winery qualifies for the R&D tax credit.

The federal government’s Research and Development (R&D) Tax Credit rewards businesses for developing new products and processes on American soil. The R&D tax credit can significantly help businesses by offsetting all, or part, of your annual tax liabilities, providing additional cash flow necessary to continue innovating and growing your business.

Wineries often believe that R&D activities must be conducted as a separate business function, causing them to overlook the daily operations it takes to get from vine to glass. You don’t need a high-tech lab to qualify for the R&D credit; just the day-in, day-out innovation of crafting new wines and creating improved winemaking processes.

Common R&D Qualifying Activities For Wineries

The key to the R&D credit is identifying qualified activity. From our experience with wineries, if you do any of the following activities, you probably qualify for the R&D Tax Credit!

• Formulating New Wine Blends
  • Formulating and testing new or improved recipes can qualify for the R&D Tax credit.
• Trialing New Cultivation Techniques
  • Experimenting with innovative cultivation processes or methods can qualify for the R&D Tax Credit.
• Integrating New Equipment Into Your Winemaking Process
  • The trial and error process of perfecting innovative system enhancements can qualify for the R&D Tax Credit.
• Testing Hybrid Grape Strains
  • Testing and evaluating hybrid grape strains can qualify for the R&D Tax Credit.
• Developing Technology That Empowers Your Business
  • Developing software or technology can qualify for the R&D Tax Credit.

Qualified R&D Expense Examples For The Winery Industry

The path to the credit is simple – connecting qualified activities to associated expenses. Regular costs such as Payroll, Contract Personnel, and the purchase of Raw Materials can be captured toward the credit. Below are some of the common expenses that qualify within the Winery Industry.

• Payroll And Staff
  • Viticulturists
  • Wineyard Managers
  • Grape Growers
  • Oenologists
  • Winemakers
  • Agricultural Scientists
  • Quality Managers
  • Process Improvement Managers
• Contract Personnel
  • Consultants
    • Sommeliers
    • Oenologists
    • Nutritionists
  • Lab Testing
  • Research Expenses
  • Third-Party Formulations
• Raw Materials
  • Grape Varieties
    • Experimental Cultivars & Trials
  • Experimental Ingredients
  • Yeasts
  • Nutrient Solutions

Potential R&D Benefit For Wineries

Most winery businesses are eligible to claim the R&D tax credit – resulting in tax savings as high as 12% of annual qualified expenditures. Our dedicated team of Food and Beverage experts routinely help wineries identify and maximize the R&D tax credit. Their experience in food science and food and beverage manufacturing has helped businesses ranging from small private wineries to multi-national food manufacturers.

We take a long-term, relationship-driven approach to the credit. Our experienced tax professionals dive deep into your business’ operations, uncovering and substantiating the credits and incentives you deserve. But our work does not stop there. After our thorough review, we recommend and implement procedural changes within your organization to help you maximize your tax benefit year after year. Ready to claim the credit you deserve?