R&D Tax Credit Case Study
Consumer Product Manufacturer Receives Substantial R&D Tax Credits
CLIENT:
A nationally recognized manufacturer of retail and custom consumer products to Fortune 500 retail chains and international food service giants maintained extensive Research and Development efforts. Continually improving food products to meet ever-changing consumer tastes, all consumer product lines were developed and manufactured at their own state-of-the-art manufacturing facility.
SITUATION:
The manufacturer’s CPA requested that SourceCorp provide general Research and Development tax benefit consultation. Our primary goal was to educate senior management on the R&D tax credit qualification requirements. Our initial review included a half-day educating the manufacturer, a physical plant tour, and formally evaluating product and process considerations. Subsequently, we determined that the manufacturer was involved in numerous potentially qualifying food manufacturing and development activities. After completing our standard evaluation process, we recommended a formal R&D tax benefit study.
RESULT:
The SourceCorp R&D team met with the manufacturer and discovered several additional qualifying R&D food activities. Consequently, the manufacturer was able to substantiate and receive significant federal and state R&D tax credits in excess of $678,000, reducing their tax liability and increasing funds available for additional innovation required for growth and to remain competitive. Moreover, the manufacturer will be eligible for annual R&D credit benefits exceeding $169,000 each year based on their ongoing investments in product and manufacturing.
