BeeHex Move R&D Operations to Ohio

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BeeHex is a 3D food production company, best known for their 3D printed pizzas. The company started as a NASA project to produce the first 3D printer to create food for astronauts (3D printing material can be stored for much longer periods than perishable and processed foods.)

Now the company is adapting to sell their printer technology commercially. BeeHex will develop production models of the 3D printers in its new Gahanna lab, which should be available to certain pilot customers by the end of 2017. Co-founder Jordan French believes that “a lot of industries are looking for solutions like this, giving employees tools to do things more efficiently.” Potential targets could include sports arenas, theme parks, restaurants or even the military.

BeeHex uses fresh ingredients to make fresh and freezable, oven-ready pizzas, which is an ideal food for 3D printing as it is constructed in layers.

The company aims to create printers that can take the customer’s preferences into account and make food on-the-spot. They have built an app that allows the customer to choose their preferred pizza size and type of dough, topping and cheese.  A conveyor belt that allows robots to then add toppings is also being developed. The technology could make it faster and easier to produce food for consumers with special requirements, without a chef having to learn specialized skills.

Like normal 3D printers, the pizza printer receives instructions from a computer and creates the pizza using layers. However, BeeHex printers use pneumatic systems instead of additive technology to move ingredients around. Initially taking six minutes to print, it now takes only a minute for a 12” pizza. A small sized pizza can then take just two minutes to cook.

Worried about the taste? BeeHex has partnered with Pasquale Cozzolino, a renowned pizza chef, who uses only the best Italian ingredients at his pizzeria, Ribalta. He stated, “I am looking forward to using my experience in the culinary industry to create a pizza that can be 3D printed without sacrificing quality ingredients and taste.”

If your company is using 3D printing, you may be eligible for the federal and Ohio R&D Tax Credit.  Contact a Swanson Reed specialist to see if you qualify.

Researchers at Binghamton, SUNY and MIT Identify Issue with 3D Printing

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Researchers at Binghamton University, the State University of New York and the Massachusetts Institute of Technology have identified an issue in 3D printers that is slowing down the printing process. If improved, it would allow faster production of 3D models.

In a paper titled, “Rate Limits of Additive Manufacturing by Fused Filament Fabrication and Guidelines for High-Throughput System Design,” researchers discovered that when printing at 0.2mm thickness, 3D printers built at a speed of around 10 to 20 cubic centimeters per hour.

Their findings stated that the printing speed is strongly related to temperature. The pinch-roller mechanism that feeds through the building material has a limited force and feed rate for melting the material completely. If the polymer was pre-heated or printed from multiple openings, the melting rate would increase and the polymer could more easily be pushed through the nozzle with the same amount of pressure. The researchers hope that their findings will inspire work like this in the future.

3D Printing for R&D

New York is the number one hub in the world for 3D printing, ahead of London and Paris, providing 453 3D printers for use.

3D printing is being used increasingly for designing, researching, testing and developing products. The creation of new or improved products with a 3D printer is generally considered an eligible R&D activity.

Businesses claiming the New York Excelsior R&D Tax Credit can receive a refundable tax credit equal to 10% of the federal R&D credit. For a free assessment, contact Swanson Reed R&D Tax Specialists to find out whether your business qualifies.

Small Businesses Can Now Apply Research Credit to Payroll Tax Liability

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The Internal Revenue Service (IRS) is offering a new method for start-up businesses to claim the research tax credit. Small businesses with gross receipts under $5 million are now able to apply part or all of their research credit against their payroll tax liability, rather than their income tax liability. The business cannot have any gross receipts pre-2012.

Prior to 2016, this was not an option, but the Protecting Americans from Tax Hikes (PATH) Act legislation, passed in December 2015, has allowed the change. The payroll tax credit is a good choice for businesses with a small or non-existent income tax liability as up to $250,000 of research credit can be applied against their payroll tax liability.

How To Apply

The IRS recently released Notice 2017-23, which provides interim guidance regarding how eligible businesses can choose this option. To apply, the business must complete and attach Form 6765, Credit for Increasing Research to their income tax return. However, if a business has already filed this tax season, they can still take advantage of the new option. Due to a special rule for the 2016 tax year, businesses that did not originally choose the option can still do so by completing an amended return by December 31, 2017.

Once the option has been selected, businesses can claim the payroll tax credit by filling out Form 8974, Qualified Small Business Payroll Tax Credit for Increasing Research Activities and attaching it to their payroll tax return.

If you would like to discuss the research tax credit further, please do not hesitate to contact one of Swanson Reed’s offices today.

R&D snowboard manufacturing lab opens in Maine

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Winterstick Snowboards, the first modern snowboard manufacturing company in the world, have opened a research and development lab in Sugarloaf Mountain Resort, Maine. The company will be led by legendary riders, Tom Burt and Seth Wescott, and Chief Engineer Daniel LeRoy.

The R&D facility will allow Winterstick to tailor their snowboards to meet respective mountain conditions and the unique styles of today’s riders. The making of each style of board is researched, exclusively designed, and hand-crafting to create a customized product specific to each customer’s requirements. Ultimately, Winterstick creates their state-of-the-art products for riders that seek complete customization in creating their dream snowboard.

The opening of the West Mountain R&D Lab returns Winterstick to its roots when Dimitrije Milovich first started designing and building his own boards in-house, and established the original snowboarding company in 1972. Winterstick has a large worldwide and loyal following and the R&D lab provides the company with the unique capabilities to turn their riders’ dream boards into a reality.

The West Mountain R&D Lab opened to start the 2016-17 season and has already produced hundreds of ‘Maine Made’ custom boards. The opening of this R&D lab allows the company to bring its innovative design and production technologies to life and craft snowboards like never before.

If you would like to find out more about R&D and whether your business could be eligible for the R&D Tax Credit, contact us today. We would be happy to assist you through the process.

Silicon Valley Company Opens Seattle Office

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Snowflake Computing recently announced the opening of an engineering office in Bellevue, Seattle, expanding away from its Silicon Valley headquarters.

Run by former Microsoft executive Bob Muglia, Snowflake is a cloud-based data analytics platform that uses SQL to organize and analyze business data. The platform was ranked the number one cloud data warehouse by Gigaom Research, receiving an impressive score of 4.85 out of 5.

Snowflake plans to hire up to 15 engineers at its new Seattle office in 2017 and expects to eventually expand to around 100. Nationally, Seattle has become a central hub for cloud technology, with companies like Microsoft and Amazon placing headquarters there.

Snowflake illustrates how thinking long-term and investing in R&D is critical in the fast-moving tech sector. In 2015, the company raised $45 million in funding for R&D and business development. Muglia stated that data warehousing was, “Ripe for disruptive innovation, driven by the shift to cloud computing and the explosion of customer interest in data insights.” Snowflake’s vision was to, “Reimagine the data warehouse for the cloud era with a completely new product built from the cloud up that doesn’t require retooling and retraining.”

Companies like Snowflake are putting pressure on even the largest companies. They outperformed Google’s BigQuery and Microsoft’s Azure SQL for the title of Best Cloud Data Warehouse. They also price matched Amazon’s S3 cloud storage service, stating that price was a key consideration for technology officers. “All organizations are keen to harness the insights derived from more and more data… It all comes down to technology and the cost of storing that data.”

Today, many billions of dollars are being invested in R&D by technology companies in order to stay relevant. Alphabet Inc, Intel and Microsoft spent over $12 billion each on R&D in 2016 for projects like Waymo, Alphabet’s self-driving car technology. Just a decade ago, the list of highest R&D spending was dominated by automotive and healthcare companies.

Corporate spending on R&D in the US is at its highest ever. A study by Bloomberg found that large companies that spent more on R&D got the largest returns with faster market capitalization growth. It also discovered that older companies that invested in continuous innovation performed better over the long-term.

Want to benefit from the federal R&D tax credit? Contact Swanson Reed R&D Tax Specialists today for an eligibility assessment.

Indiana research and development facility creates over 100 jobs

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Faurecia Clean Mobility, one of the world’s largest automotive equipment suppliers, announced plans to open a new research and development production facility in Fort Wayne, Indiana.

The opening of this new facility will create over 100 jobs and provide local job seekers, within the automotive productions industry, with some fantastic opportunities.

An initial investment of $4 million will be made in order to begin operations at the 137,500 square foot facility. Fort Wayne’s Mayor, Tom Henry, said this investment is an outcome of the city’s strategy to remain and attract quality employees in Indiana.

As leading companies in innovation, such as Faurecia, continue to become established and develop their R&D focus in Indiana, the state is able to leverage significant competitive advantage. This highlights the importance of companies approaching business practices from an innovative and unique angle, such as engaging in R&D initiatives.

Innovation and research forms the backbone of Faurecia’s activities from the birth of an idea to the final validation of the concept. The role of Faurecia’s R&D organization is to anticipate the needs of the global automotive market and drive progress. Faurecia currently relies on the network of 30 R&D centers, which employ 6,000 engineers and technicians in 11 countries. This pinpoints the overall impact that engaging in R&D can have on an organization, as it not only affects company developments, however, also facilitates significant employment opportunities.

Faurecia is reliant on its R&D facilities worldwide, in order to be more in touch with the needs of various automotive markets, particularly in growth regions. R&D has allowed Faurecia to advance expertise, form effective collaborations and partnerships, extend the company’s network, and allow it to produce and release groundbreaking and state of the art products.

To determine whether your company is eligible for the R&D Tax Credit and could potentially achieve similar successes from incorporating R&D in its business practices, contact one of Swanson Reed’s R&D tax specialists today.

Which Texan City is Exceeding Tech Job Growth?

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From 2015 to 2016, tech jobs in Texas increased by 1.9%, producing 11,000 new jobs. Yet the standout city was Dallas, creating 2,978 jobs last year, mainly due to strong growth in computer systems design, telecommunications services and IT services.

With the exception of California, Texas hires more tech workers than any other state. Last year, 2,196 tech jobs were generated in Houston, 974 in Austin and 843 in San Antonio, bringing the total number of tech employees in the state to 592,960. These cities are among the fastest-growing metro areas in the US. Popular tech jobs include computer user support specialist with almost 5,000 workers in San Antonio alone, followed by application software developer with 4,620 employed.

Interestingly, Austin ranked 1st for start-up hubs based inland and 6th in the US overall, demonstrating that entrepreneurial activity is now occurring away from the typical coastal regions and well-known technology hubs. In actual fact, start-ups are now being formed in every state, in what has been termed, “The Rise of the Rest.” This is significant as high-growth start-ups provide the most potential for employment growth; they tend to create jobs faster than more established organizations.

Nationally, the tech sector grew by almost 3% in 2016, with California, New York, Florida and Massachusetts also among the top states for tech jobs. Tech job gains were largest in California, New York, North Carolina, Texas and Michigan.

Today, there are more US workers in tech jobs than in finance, transportation or construction. Since 2010, there has been a 2.7% gain each year for the sector. Technology is transforming every industry, as businesses become more and more reliant on IT for growth. Tim Herber from CompTIA, declared that, “Organizations of all sizes are embracing cloud-based technology solutions, expanding their mobile presence, fortifying cyber defenses and driving decision-making through advanced data analysis.”

The federal and state R&D Tax Credit is available to technology companies who are developing new or improved software, products, formulas or processes, among other activities. To find out whether your company is eligible, contact Swanson Reed R&D Tax Specialists.

How to Get the Most Out of Your Research & Development Tax Credit

One of the many reasons why the United States is a global leader in science, technology, and innovation is the Research & Development Tax Credit offered by the US government. The program involves a series of tax credits that offer financial relief to companies that are on the cutting edge of technology. If your business is doing exactly that, then it is time to take full advantage of the research and development tax credit. Here are just a few ways to make the absolute most of those R and D tax credits so you can help your business innovate faster and take products to market more quickly.

1.  Gear Your Research to What Can Be Credited

While the tax credit program is robust, it does not extend to absolutely every kind of research and scientific inquiry. It focuses instead on a few major industries that can help change the world and innovate how we do things. To that effort, the absolute best and easiest way to make the most of the tax credits available is to ensure that your research is in the areas that are eligible.

What you can research is subject to guidelines, but how you do your research is also subject to certain guidelines. The government requires that all businesses taking advantage of the research and development tax credit must follow four key criteria: a clear and permitted purpose, an elimination of uncertainty in the research techniques, a detailed explanation of the research process, and a technological nature behind the research and discoveries. By sticking to the guidelines, you have a much better chance of getting the most out of your research, and your tax credits.

2.  Hire Professionals

You probably have accountants for your books so you can take advantage of every tax program you can. It’s a responsibility you have to your company to do so. The same approach should be taken with your research and development tax credit. Without professionals helping you discover the many facets of research and development tax credit, you could end up missing out on its full potential. That is why you should call up the professionals, like the talented financial professionals at Swanson Reed, to help you and your business maximize your research and development tax credit.

Research and Development Tax Credit

3.  Think Ahead

One of the beautiful things about the research and development tax credit is that it provides you and your business with a stable, reliable source of financial relief. The tax credit is almost like a salary: a predictable income source on which you can rely, and one that, when it comes to your business, can help you plan for the future.

On top of gearing your research to what is included in the tax credit, move some of your resources to departments that will speed up the processes between research and putting a product to market. By reorganizing your assets based, in part, around what you will receive as part of your research and development tax credit, you can streamline your entire company and, as a result, start selling things on the global marketplace much faster.

Maximizing your research and development tax credit is about moving forward—not simply figuring out your present situation—so start planning for the future! Contact us as Swanson Reed today to get started.

Five Questions & Answers about R&D Tax Credits

1.  What are R&D Tax Credits?

The federal R&D Tax Credit is the Research and Experimentation Tax Credit, available to companies that incur research and development costs in the United States. The R&D credit is used as a tax incentive for performing qualified research within the United States, resulting in a credit to your company’s tax return. This credit was established as a part of the Economic Recovery Tax Act of 1981 and was intended to act as an economic stimulus, encouraging investment within the U.S.

2.  Who is Eligible to Receive R&D Tax Credits?

Federal R&D Tax Credit laws apply to all eligible R&D activities, but there are three different types of credits available. These types include: Traditional Credit, Start-Up Credit, and Alternative Simplified Credit. In order to determine which type of tax credits your company is eligible for, your qualified research must meet the requirements outlined in the Four-Part-Test, a quick guide that is available on Swanson Reed’s webpage. Most industries and businesses can qualify for the R&D Tax Credit if they can pass this test, which is used by the IRS to determine eligibility.

3.  Are R&D Tax Credits Only Available on a Federal-Level?

Not only are industries and businesses able to claim the R&D Tax Credit at a federal level, but if your company exists in Texas, you may be eligible for state-level credits as well. Texas R&D Tax Credits were reinstated for use between 2013 and 2026. This state-level tax credit uses the same information as the federal credit, so you need not worry about gathering two separate sets of information to apply. If you are applying on a federal level, it is definitely worth considering applying in Texas as well because it requires minimal additional effort.

R&D Tax Credits

4.  Are you Worried About Being Audited?

Many businesses that choose not to partake in the benefits of applying for the R&D Tax Credit do so in fear of being audited by the IRS. In the United States, the government is allowed to audit a company at any time in order to ensure compliance. If you do the proper preparation and planning and understand how to keep your accounts and documentation correctly stored, there will be no need for you to be worried. Developing your business and making improvements to the benefit of your industry and economy is more important than anything else. As long as you’ve worked through the planning, ensuring that nothing is left to chance, you will have the proper paperwork to support the claim.

5.  Who Can Help Prepare R&D Tax Credit Claims?

At Swanson Reed, we are dedicated to helping industries and businesses succeed in their applications for the R&D Tax Credit. We will help you with your accounts management so everything adds up when it is time to file your claim. We will assist in the preparation of your claim, and we are also experienced in dealing with IRS audits. We support our clients every step of the way, eligibility criteria and documentation support included. Contact Swanson Reed today at (800) 986-4725 or through our contact form to get the R&D Tax Credit process started.

Maryland Ranked 1st for Innovation Environment

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Personal finance website, WalletHub, has ranked Maryland 1st in the country for its Innovation Environment.

The 12 Innovation Environment indicators were:

  • Share of technology companies
  • R&D spending per capita
  • Ratio of total R&D performed to state GDP
  • Invention patents per capita
  • Entrepreneurial activity
  • Tax-friendliness
  • Industry-cluster strength
  • Drone-friendly laws
  • Average Internet speed
  • Share of households with Internet access
  • Venture-capital funding per capita
  • Average annual federal small-business funding per GDP

Overall, Maryland was ranked the second most innovative state in the US with a ranking of 69.82 on a 100 point scale, just behind its neighbour, the District of Columbia with a ranking of 70.87.

Ranked 2nd overall in the Human Capital category, Maryland came 2nd for its share of science and engineering graduates. It placed 3rd for its share of STEM professionals and projected STEM-Job demand by 2020.

Other states that ranked well were Massachusetts, California and Colorado. Conversely, the least innovative states included West Virginia, Mississippi and Louisiana.

What Makes Maryland So Innovative?

Innovation is fostered by sustained investment in R&D, education and business creation and the development of a strong collaborative attitude. For instance, the University of Maryland plans to open an innovation center this summer to encourage entrepreneurial activities on campus and to encourage all of the University System of Maryland schools to work together.

International projects such as the Maryland International Incubator (MI2) have even greater potential. The MI2 aims to connect Maryland with global organisations, to produce successful joint ventures using world-class resources. This increases commercial activity and provides cultural learning opportunities for students.

Maryland R&D Tax Credits

Innovative businesses in any industry can apply for the Basic and Growth R&D tax credit in Maryland. To be eligible, the company must incur qualified research and development expenses as defined by section 41(b) of the Internal Revenue Code in Maryland. This could include software development or testing of new concepts or technology. The credit is refundable, allowing it to be reinvested into the business. The application deadline is September 15 of the following the tax year in which the expenses were incurred.

To find out whether your company is eligible to apply for the R&D tax credit, please contact Swanson Reed R&D Tax Specialists.