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R&D Tax Credits for the Food Sciences and Bio-Flavoring Industry

A. Chris Ostler, CPA

November 22, 2022

The food sciences and bio-flavoring industry continues to invest on a large scale every year to develop healthier food choices that contain:

  • No Trans Fat;
  • No MSG;
  • Reduced Sugar;
  • Reduced Sodium;
  • Gluten Free;
  • No Artificial Flavors;
  • No Artificial Preservative; and
  • No GMOs.

These scientific advancements within the food sciences industry are significant for these new food products. Moreover, to extend the shelf life of these food choices, companies are researching new forms of packaging to extend the life of products and reduce their environmental impact and overall carbon footprint. However, many of these companies are unaware that their research and development efforts can constitute qualified research and development spending and be eligible to claim a research tax credit on their tax returns. The following are some of the activities that may qualify for the R&D tax credit program:

  • Designing and developing new healthier food choices
  • Designing and developing new packaging or redesigning existing packaging for the purposes of: Eco-Friendly Manufacturing (e.g., biodegradable, recyclable, energy efficient) and Shelf Life Improvement Manufacturing (e.g., radiating food to extend shelf life)
  • Designing and developing food formulas for desired flavor or aroma profiles;
  • Improving existing food product formulations to achieve specified analytical metrics (i.e., pH level, acid content, and product viscosity);
  • Developing new production process specifications and techniques for the production of new food products, including mixing times, batching sequences, and cooking temperatures and durations;
  • Successful scale-up from the laboratory to the plant level for commercialization of the new product; and
  • Improving existing production processes for efficiency and waste reduction

Veritax Advisors’s professionals are available today to provide tax savings while mitigating tax compliance risk! Please contact us today at 888-939-3309 or to see if you qualify for the R&D Tax Credit Program!

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