Delaware – Page 2 – Swanson Reed | Specialist R&D Tax Advisors

W7energy Expands and Rebrands as Versogen

Versogen, previously W7energy is looking to create green hydrogen through advancing anion exchange membrane (AEM) technology. Its green hydrogen will lack any carbon emissions, which is in contrast to 95% of hydrogen created for the heavy industry. Versogen wanted a name that reflected their desire to create sustainable resources and their versatility. Hydrogen is very versatile itself and useful in many industries, especially any industry that uses high temperatures.

With green hydrogen, carbon emissions could be reduced in mineral extraction, oil refining, and even storing and producing electricity. To make green hydrogen, the company’s new electrolyzer model uses water and renewable resources, but nothing else. Versogen believes this model will help transform the globe’s energy industry to be a carbon neutral space.

Are you developing a new process? Did you know your development work could be eligible for the R&D Tax Credit and you can receive up to 14% back on your expenses? Even if your development isn’t successful your work may still qualify for R&D credits (i.e. you don’t need to have a patent to qualify). To find out more, please contact a Swanson Reed R&D Specialist today or check out our free online eligibility test.

Who We Are:

Swanson Reed is one of the U.S.’ largest Specialist R&D tax advisory firms. We manage all facets of the R&D tax credit program, from claim preparation and audit compliance to claim disputes.

Swanson Reed regularly hosts free webinars and provides free IRS CE and CPE credits for CPAs. For more information please visit us at www.swansonreed.com/webinars or contact your usual Swanson Reed representative.

Delaware Patent of the Month – September 2020

Delaware based DuPont has received a patent for its biopesticides, using novel genes that encode pesticidal proteins to produce transgenic pest-resistant plants. Or, simply, it has found a way to keep plants insect-free without chemicals, by engineering them to pretect themselves.

Using a microbial agent (e.g. fungi or bacteria) as a pesticide has a lower risk of pollution and environmental hazards than chemicals, and they provide more targeted than traditional chemical insecticides. They’re also cheaper to produce and utilize.

DuPont’s patent involves genetically engineering plants with insecticidal proteins from other plants and insects, to create biopesticides. For example, Bacillus species microorganisms (e.g. some moths, worms and beetles) have natural pesticidal activity to protect against more harmful insects. And, Pteridophyta (fern and moss plants) and Lycopodiophyta (vascular plants) also have a similar insecticidal protein. So, crops have been genetically engineered to produce proteins associated with these organisms. The pesticidal proteins control, inhibit growth or kill Lepidopteran (moths and butterflies), Coleopteran (beetles), Dipteran (flies), fungal, Hemipteran (bugs) and nematode (worms) pest populations.

Are you developing a new product or process? Did you know your R&D experiments could be eligible for the R&D Tax Credit and you can receive up to 14% back on your expenses? Even if your development isn’t successful your work may still qualify for R&D credits (i.e. you don’t need to have a patent to qualify). To find out more, please contact a Swanson Reed R&D Specialist today or check out our free online eligibility test.

Who we are:

Swanson Reed is one of the U.S.’ largest Specialist R&D tax advisory firms. We manage all facets of the R&D tax credit program, from claim preparation and audit compliance to claim disputes.

Canine COVID-19 Detection Training Has Begun, With Help From a Delaware Startup

Dogs can’t catch COVID-19, but they might be able to detect it and help us stop the spread. A Delaware startup has developed a device to safely train dogs to sniff out the virus.

TADD

SciK9‘s TADDs (training aid delivery devices) are simple: a container, a membrane/filter, and a lid. The odor permeable membrane structure is the star of the show: made of a gas-tight chemical-resistant gasket, hydrophobic and oleophobic membrane, and a custom polypropylene membrane holder with a safety grid placed over the membrane to prevent puncture. It only allows odors through, so there is a scent but no actual exposure to the substance. The container lid is also gas-tight and chemical-resistant.

The TADD is the only training aid containment device to:

allow odors to be turned on/off,
securely contain liquids, oils, solids, small particulate, and hazmat,
extend the training aid (i.e. substance) shelf life, and
completely protect the animals and handlers from the substance.

Not only that, but all materials pass NASA’s Outgassing Compliancy tests, meaning that the product has no odor, so dogs are trained on exactly the substance odor.

SciK9, TADD and COVID-19

The TADD prototype was first developed in 2013 as part of research for the U.S. Army’s military explosives community canine detection program. Over seven years, the product was improved for durability, and many different uses. Michele Maughan, a researcher involved in the project, founded SciK9 in early 2020, with the intention of providing safer training to dogs who detect explosives, narcotics, medical diagnosis, etc.

However, SciK9 saw the need for its product immediately with the COVID-19 pandemic. Maughan, with the U.S. Army and the University of Pennsylvania, sought to explore the possibility of dogs detecting biomarkers produced by COVID-19 in humans. Discussions of this project began on March 27, ten days later planning started, and by the end of May COVID-19 human samples had been collected and dogs began training. The dogs never have exposure to the virus but are trained to detect human immune system responses to the virus. The goal is for the dogs to sniff out the disease in humans even before symptoms occur. SciK9 was recently awarded the Booz Allen Foundation Fund Grant, which will fund 250 TADDs for continued research.

Are you developing a new invention? Did you know your R&D experiments could be eligible for the R&D Tax Credit and you can receive up to 14% back on your expenses? To find out more, please contact a Swanson Reed R&D Specialist today or check out our free online eligibility test.

Who We Are:

Swanson Reed is one of the U.S.’s largest Specialist R&D tax advisory firms, offering tax credibility assessments, claim preparation, and advisory services. We manage all facets of the R&D tax credit program, from claim preparation and audit compliance to claim disputes.

Swanson Reed regularly hosts free webinars and provides free IRS CE and CPE credits for CPAs and CFPs. For more information please visit us at www.swansonreed.com/webinars or contact your usual Swanson Reed representative.

2019 Innovation Rankings By State

The United States is usually accredited as one of the most innovative nations in the world. However, that does not mean the country’s technological and innovation quests are divided equally around the nation.

Burgeoning technology and innovative concepts usually find their inception in major regions such as San Francisco and New York, while middle tier states in the nation try to play catch-up.

With the United States predicted to spend approximately $581 billion on Research and Development (R&D) in 2019, and New York City recently no longer under consideration for Amazon’s 2nd headquarters, finance and research website WalletHub recently published an enumeration ranking the 50 U.S. States and District of Columbia in terms of innovation rate.

It came as no surprise that the least innovative states on the list included the Midwest states, usually ignored by leading tech firms in favor of metropolitan areas that have historically enticed top tech talent and major tech firms.

In order to come up with the rankings, Wallet Hub based its findings on multiple metrics divided into two different categories: innovation environment and human capital.

The human capital category includes units such as projected STEM job demand in 2020, the share of STEM professionals, and participation and performance in high school level science and math exams.

The innovation environment category, on the other hand, included each state’s tax-friendliness, number of jobs in new companies, level of research and development spending, and every state’s share of firms that are tech oriented.

Below are the most and least innovative states in the U.S. according to WalletHub:

Most innovative states

Massachusetts
Maryland
Washington
District of Columbia
California
Colorado
Virginia
Utah
Delaware
Oregon

Least innovative states

Oklahoma
Nebraska
Hawaii
Kentucky
Iowa
Tennessee
Arkansas
West Virginia
Louisiana
Mississippi

How Does Your State Rank on the Innovation Scale?

Innovation Is Key

Innovation is crucial to sustainable economic growth, but for innovation to occur businesses must have both the incentive and the capacity to invest.

As innovation is key to the United States’ economy as a whole, many U.S. states are showing off while others are falling short when it comes to patents, R&D, venture capital and academics.

So which states are excelling in innovation and which ones are lacking, you ask?

Patents

The top states in patents per population include:

Wisconsin
Washington
Texas
Utah
California
Massachusetts

The bottom five patented states include:

Alaska
Mississippi
Tennessee
West Virginia
Wyoming

Venture Capital

The top states for venture capital are:

Massachusetts
California
Utah
Washington
Colorado

The lowest are:

Arkansas
Alaska
Hawaii
Wyoming
Iowa
South Dakota

R&D Spending

The leaders in R&D spending are:

Delaware
Michigan
California
Connecticut
Massachusetts

The states that spent the least on R&D include:

Arkansas
Wyoming
Louisiana
Alaska
Mississippi

Academics

As for academics, the top states include:

New Mexico
Maryland
Rhode Island
Massachusetts
Alabama

The lowest academic rankings were for:

Louisiana
Arkansas
Delaware
Wyoming
Nevada

If you are a U.S. based company conducting R&D you may be eligible for the federal and/or state research tax credit. Please contact a Swanson Reed representative to find out further information.

Governor Carney first executive order focused on business

Governor John Carney signed his first executive order on Wednesday introducing supportive measures for Delaware’s startup community.

The executive order establishes a public-private partnership within the Delaware Economic Development Office (DEDO) and tasks a 14-member working group with finding out how the state can help Delaware’s businesses thrive and attract more talent, as well as “support innovation,” according to a release.

The group will work closely with entrepreneurs and deliver a set of recommendations to the governor this coming April.

“Delaware’s economy is in a period of significant transition, and we must adjust our efforts to compete with other states and countries for jobs and talent,” said Carney in a statement.

The initiative is promising for the startup community, which has long been calling for more support from the state.

“I look forward to seeing who is on the working group and how well they understand the needs of the startup community as a whole,” said Mona Parikh, managing director of Start It Up Delaware and the tech community liaison for UD’s Horn Program in Entrepreneurship, who was present at the signing of the order. “Or how much of an effort they put forth to understand its needs, if they are in fact not well-versed in them.”

DuPont investing $200M in Delware research center

The existing DuPont Experimental Station in Wilmington, Delware will soon be renting out their newly redeveloped research space.

During remarks at a Delaware state chamber of commerce meeting, CEO Edward Breen told the room that “Our board of directors just approved a plan to spend $200 million to modernize and upgrade Experimental Station. We’re going to optimize many of our labs, we’re going to set up networked collaboration for our scientists, for our customers.”

Breen elaborated that the upgrade would help allow third-party companies to come in.

“They are going to have to be science-based companies. I’m hoping that there are some with contiguous things that DuPont is interested in. But we really want to use it as an incubation center,” he said.

DuPont’s Experimental Station has a remarkable history of innovation. Opened in 1903, the space was started to help transition DuPont from producing gunpowder and explosives to more chemicals. The research center became the birthplace of some of chemistry’s most notable achievements including Nylon, Kevlar, Mylar polyester and Neoprene — the first synthetic rubber.

The entire center includes more than 50 buildings on 250,000 square meters of space.

Typically around 2,000 scientists now work at the center. But after the $130-billion Dow-DuPont merger was announced in December 2015, the company laid off around 200 scientists at Experimental Station. The layoffs were part of a workforce reduction in Delaware that totaled 1,700 positions.

Some critics have argued that the proposed merger with Dow could be the “death of innovation” but DuPont has announced that it plans to spend $1.7 billion on R&D this year — up from $1.6 billion in 2016.

Several other companies already use space at Experimental Station including Chemours, a DuPont spinoff, and Hygenia, a life sciences company.

Delaware Modifies State R&D Tax Credits

Worth approximately $7 billion annually in recent years, the research and development (R&D) has grown exceptionally since its inception. To begin with, tax credits for spending on R&D were first enacted into federal law in the U.S. in 1981. In the ensuing quarter century, many states have adopted such tax credits, often using the federal tax credit as a prototype. Even so, many state credits have different credit limitations and amounts, as well as varying sunset dates and other important provisions.

Nonetheless, the fact remains, over the past two decades R&D tax credits offered by U.S. states have become widespread and increasingly valuable to firms. The process began when Minnesota became the first state to enact an R&D tax credit in 1982, one year after the introduction of the federal R&D tax credit. Since then, the number of states offering such a credit has risen steadily. Now, Delaware has recently made revisions to their state credit to expand its use. The changes come amid Virginia’s recent amendments last month.

To elaborate, S.B. 200 has made significant amendments to Delaware’s state research and development tax credit. These modifications to the research and development credit, as well as changes made to other Delaware tax credits, were made as a result of a merger between DuPont Co. and Dow Chemical Co.

Previously in Delaware, the aggregate credit limit per fiscal year was $5 million, and no one credit was permitted to exceed 50 percent of a taxpayer’s tax liability. However, for qualified research expenses beginning Jan. 1, 2017, both limitations have been removed. In addition, the credit has become refundable.

Overall, the recent legislation in Virginia and Delaware highlight the importance of knowing the differences that make up this popular credit in each taxing jurisdiction. Undeniably, tax credits for research and development are some of the most popular credits available. For a discussion of the various state research and development tax credit, and the federal tax credit for increasing research activities, contact one of Swanson Reed’s R&D tax specialists today.