Fort Worth in Bidding War to Win Next Spot for $5 Billion Investment in New Amazon Headquarters

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Amazon is always coming up with something new, whether it is Amazon Prime, Amazon TV, or now a flying airship warehouse to deliver products to customers. This new invention is like something we have never seen before and is completely new technology. Amazon is able to claim research and development (R&D) tax credits due to the highly technological nature of this product. Companies who are experimenting and testing new products, procedures etc., are eligible for R&D tax credits.

Amazon will be investing $5 billion dollars into a new headquarter building that they are looking to build in the U.S., Fort Worth (FW) is on their list of top contenders. Brendan Gengelbach, the executive president at the FW Chamber of Commerce says he has already spoken with state officials and real estate reps about the possibility of Amazon opening up their new headquarters.

Amazon will bring billions of dollars in investments for FW if this is to happen. Amazon has already said that they are looking into the possibility of tax incentives for this project. If your company is experimenting with new products or technologies, contact a Swanson Reed R&D Tax Advisor today to check your eligibility.

Chinese Made Tires- Foreign Investment with Georgia Tire Company

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Sentury Tire, a Chinese based tire manufacturer, is building a world class factory in Georgia, covering 450 acres in LaGrange. Once the factory is complete they hope to have three shifts a day with more than 100 workers on each shift, 100 specific maintenance positions, manual logistics employees, sales staff, as well as their own R&D center with 100 employees.

This new facility will present many opportunities for Sentury Tire North America (STNA), who are planning to optimize their manufacturing process and use new technology to streamline production. STNA plans to build and purchase 24 new machines for the factory and are keen on claiming R&D tax credits to help fund future technology acquisitions. They are also looking at different methods to minimize shipping costs and packaging time. These activities present opportunities to claim R&D tax credits, which can be used to provide further funding for development.

If you would like to find out how your company could benefit from R&D tax credits, contact a Swanson Reed R&D Tax Advisor today.

3D-Fuel Introduce a New Water-Soluble 3D Printing Filament

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HydroSupport is a new water-soluble 3D printing filament created by the manufacturing company 3D-Fuel. The filament takes between 12 and 24 hours to dissolve entirely, and can be expedited by using agitation and warm water, such as a heated ultrasonic tank. It is non-toxic, as 3D-Fuel attempt to create sustainable printing filaments that won’t harm wildlife or the environment. The company make various environmentally friendly 3D printing filament including coffee, beer, landfill and hemp filament.

Available in 1.75 and 2.85mm diameters, Hydro-Support is strong and the end result feels like PLA. It is clear in color and is vacuum sealed to protect it from moisture in transit.

3D-Fuel manufacture all printer filament in their own manufacturing facilities in Fargo, North Dakota and Moville, Ireland. The quality is tested extensively on a range of 3D printers including MakerBot, FlashForge and LulzBot and the width is carefully controlled using a multi-axis laser measurement system to help prevent issues caused by fluctuating diameter.

HydroSupport is designed as an easy-to-use support material for printing complex inner geometry, deep cavities or large extensions. It is allegedly easier to print with than other water-soluble filaments on the market, like PVA, which has high water retention that can make print jobs harder. Support structures are used when a design consists of complex shapes that can’t be printed on their own. They are then removed after the object is printed. However, removing the supports can be difficult and dangerous when requiring chiseling or chemical bathing. Alternatively, HydroSupport does not require manual removal and does not contaminate the environment with chemicals.

3D printing is a great indicator of R&D expenditure. If your business is using 3D printing, you are likely eligible for the R&D Tax Credit. The R&D Tax Credit allows a credit of up to 13% on eligible spending on new and improved products and processes. Get in touch with the experts at Swanson Reed to find out more.

Photo credit: westonhighschoollibrary via Foter.com / CC BY-SA

R&D Tax Incentive inspiring ground-breaking research

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3D printing has revolutionized hundreds of industries and has been particularly notable in the biomedical field. The technology is being used to make prosthetic limbs, replacements for bones, tendons, functional organ pieces and living human tissue for the testing and development of new drugs.

In 2007, Keith Murphy and Professor Gabor Forgacs from the University of Missouri founded the company Organovo. Organovo designs and prints functional human tissue for disease modelling and toxicology, human body implants and drug research and testing. The company also provides 3D printed tissue to academic facilities allowing future medics to get better training.

With the 3D printing market becoming increasingly more popular to invest into, particularly with the increase of government incentives for research and development, companies like Organovo can significantly benefit from substantial tax credits.

The federal R&D Tax Credit allows a credit of eligible spending for new and improved product and processes if qualified research meets the following four criteria:

  • New or improved products, processes or software
  • Technological in nature
  • Elimination of uncertainty
  • Process of experimentation

In 2015 the R&D Tax Credit became permanent, allowing the claiming of employee wages, cost of supplies, cost of testing, contract research expenses and costs associated with developing a patent. In 2016 start-up businesses could begin to utilize up to $250,000 credit in payroll taxes, which is particularly beneficial for 3D bio printing companies like Organovo, due to the long R&D time period of the projects.

The R&D tax incentive scheme has allowed for some ground breaking research achievements which will significantly benefit the wellbeing and treatment for people as well as improving future research. Organovo have been able to produce a 3D liver, named the ExVive Human Liver, which is being used to study predictive liver tissue-specific toxicity. The company has also created the ExVive Human Kidney which is being used to study nephrotoxicity due to drug responses. Additionally, the Missouri founded research company is also working on 3D printed tissue to be used as a source of therapy for patients with damage and disease to natural tissue.

Such ground-breaking findings pin point the significance of R&D tax credits in supporting innovation and development of revolutionary technologies. If you would like to find out more about the R&D incentive and whether your company may qualify for a tax credit, contact a Swanson Reed R&D tax specialist today, we look forward to speaking with you.

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.

Income Boosts From Innovation Are Not Just For Laboratories

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In an age of rapid change and modernization, hot words such as innovation, research and development, and growth are popularly thrown around. However, what many are still to realize, is the relation of innovation and companies that have nothing to do with lab coats.

 

Business Innovation quoted Martin Parkinson saying, “We tend to think of innovation as being done by start-ups or people in white coats, but it’s much more than that. By and large our greatest gains have come from building a culture that adapts and diffuses the ideas of others.”

 

Innovation is for everyone. In fact, Business Insider claims that, “innovation is good for income.” Innovation can be the adaption of a product manufacturing line to include newly redesigned technology or functionality. Innovation can be the development of new software technology that allows vehicles to autopilot completely, differentiating that company from the market. Innovation can be the research and creation of a new screening technology for cancer within the body.

 

Through the process of research and development (R&D), innovations can increase income when successfully applied. The world’s most successful and innovative companies are known for their large R&D programs turning innovation into business and revenue.

 

Business Insider reports that the majority of innovation stems from previously existing ideas that are then adapted and altered. For companies that are not yet profitable or for startups investing in R&D, the research and development tax incentive is a valuable tool.
If  you would like to discuss the R&D Tax Incentive further, please do not hesitate to contact one of Swanson Reed’s offices today.

R&D Within the Smartphone Industry

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Reuters reported Apple’s commitment to invest roughly $44 million in a research and development center in Indonesia. The investment will allow Apple to begin selling the iPhone 7 as the government has stipulated 30 percent of handsets sold within the country must be made of local content which includes hardware, software or investment commitment.

 

Apple’s local content certification received in November allows the company to begin selling the iPhone 7 as of January 2017.  The agreement allows Apple to sell products of $488 (6 million rupiah) value and above.

 

As said by Suryawirawan, director general of metal, machines, transport equipment and electronics at the industry ministry, ” they can distribute devices priced 6 million rupiah ($448) and above. That means all iPhones can be distributed.”

 

With Samsung controlling 26 percent of the smartphone sales in Indonesia, and China’s OPPO holding 19 percent market share, Apple will have tough competition for one of the biggest social media markets worldwide.

 

The company has been trying to enter the market for some time, however, as Q3 of 2016 showed Apple’s first decline in revenue in over 15 years, this is a very important moment. As the iPhone comprises two thirds of the of the company’s total revenue the success of this market would have a large impact on revenue.

If  you would like to discuss the R&D Tax Incentive further, please do not hesitate to contact one of Swanson Reed’s offices today.

New York Announces an Initiative of $650M for Life Sciences

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The Empire State Boosts Life Science

With the aim of becoming a top tier biocluster state, New York has announced an initiative to increase the state’s ability to commercialize research by investing $650 million into life sciences. The incentive hopes to have a success rate similar to those of California, whose company growth has accelerated that of job growth and Massachusetts, which invested $1 billion in a highly successful life sciences program 10 years prior.

As announced by Governor Andrew Cuomo the initiative will include $250 million in tax incentives for life science companies (new and existing), $200 million for capital grants towards wet labs and innovation space, $100 million towards early stage life science development and $100 million towards operating support from private partnerships.

The term life sciences has been defined by New York State as including, “biopharma, biomedical technologies, life systems technologies, as well as organizations and institutions that devote most of their efforts to research, development, technology transfer, and commercialization.”

In recent years, despite the presence of major academic research centers and Wall Street, New York has lacked commercialized research, early-stage company incentives, and biocluster development reported by Genetic Engineering & Biotechnology News.

Good News For R&D

The incentive will support the job market by investing $10 million annually in the Excelsior Job program. Refundable tax credit will be available at a 15% rate to life science businesses and at a 20% rate for small life science businesses.

The state also plans to attract life science talent to the state through internship programs, research recruitment programs, a mentor program to bring together entrepreneurs and innovators, and a program to support teaching hospitals with over $8.5 million in support annually.

If  you would like to discuss the R&D Tax Incentive further, please do not hesitate to contact one of Swanson Reed’s offices today.

Future R&D Spending within OECD Countries

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Predicted Spending 

At a time when aging populations and the environmental challenges of climate change are in need of innovative solutions the decline in public-backed science and technology research is a concern. Data from the Organisation for Economic Co-operation and Development (OECD) shows the first fall of R&D spending in government and higher education in 2014 since the organisations conception in 1981.

The OECD Science, Technology and Innovation Outlook Report showed increased R&D spending from 2000 in Korea, Japan and Germany while the UK, US, Australia, FInland, Italy, France and Spain have decreased spending. Owing to the financial recession, overall government spending in OECD countries has been in decline since 2009.

With the combination of competing policies such as pensions, health and social care and the annual loss of tax revenue, conservatively estimated between $100 billion to $240 billion, the OECD says the warning signs are there. The organisation expects to see a greater decrease in government-backed science.

Increasing the R&D Tax Incentive

As budgets are increasingly tight, governments are increasing the use of policies that do not require short term public spending, partial public procurement and tax incentives for R&D and innovation.

Also, the increase in philanthropists, charities and foundations funding research has helped to balance the government drop off. These funds are estimated to support about 30% of annual research in leading US universities.

Specialization

The OECD has noted that specialization might be a key element within the recent climate. As the US devotes 24% of R&D spending to health, Canada, England and Luxembourg focus about one fifth of their budgets, and countries such as Mexico, Japan and Korea focus on energy.

If  you would like to discuss the R&D Tax Incentive further, please do not hesitate to contact one of Swanson Reed’s offices today.

Tax Incentive Changes in Nebraska Legislation

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The Nebraska Advantage Act

A recent report on the business tax incentive programs in Nebraska suggest that in the past eight years, the program has not been as effective as desired in attracting new business to the state. According to the recorded growth, only nine new companies were established in Nebraska over an eight year time period.

Each of these new jobs created within the state cost the local governments and state between $24,500 to $320,000 with the Nebraska Advantage Act. However, this among other incentives, encouraged 69 business to add positions between 2006 and 2014.

This variation of results has spurred a discussion of overlapping incentives and receiving incentives from multiple states.  

Quality Over Quantity 

The report stated that of the 78 business studied, 75% had benefited from additional programs. These programs included customized job training, state-supported internships and research and development tax credits (R&D).

Renee Fry was quoted saying, “We hope that lawmakers will conduct a broader examination of exemptions and incentives to see if their benefits justify their cost, as it is vital to ensure state tax dollars are used as efficiently as possible.”

While the research and development tax incentive does not seem to be at risk as the report mainly focuses on the Nebraska Advantage Act, the incentive program is named as one of the overlapping incentives.

If  you would like to discuss the R&D Tax Incentive further, please do not hesitate to contact one of Swanson Reed’s offices today.