New Hampshire Businesses Celebrate Newly Raised Cap on Research and Development Tax Credit

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New Hampshire businesses are now able to claim up to three times the amount in the state’s research and development (R&D) tax credit. The cap for claims has been raised from $2 million to $7 million, effective July 1.

Although local governor, Chris Sununu, thanked the “Republican leadership of the Legislature” for the increase, the  change was in the works long before the current Legislature. 2015 governor Maggie Hassan originally vetoed the budget, stating it was unbalanced due to corporate tax cuts. Eventually, Hassan stood behind the budget with the caveat of having business tax rate cuts aligned with New Hampshire’s fiscal health. Nothing, however, was mentioned regarding the R&D tax credit.

The R&D tax credit helps to strength the economy of small businesses, especially those involved in high-tech. Created in 2008, the state R&D tax credit was originally capped at $1 million. In New Hampshire, 71 businesses applied for the credit during its first year. Following this, the credit cap was lifted to $2 million in 2013, and 155 businesses applied for the credit. It is estimated that this number will grow in the current year, especially with the current credit cap of $7 million.

Businesses are allowed to claim credit for 10% of their research and development costs, to a maximum of $50,000. Interestingly, this maximum has never been reached as the demand for the credit has always been greater than the supply.

Is your business involved in innovative projects relating to research and development of new products or processes? You may qualify for the R&D tax credit. To learn more about the federal and state R&D tax credit incentive program, contact a Swanson Reed Tax Advisor today.

Navy to conduct drone flight research

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The short-term R&D project, in which unmanned aerial systems (UAS) will be tested, is being conducted by the Office of Naval Research with the Raspet Flight Research Laboratory at Mississippi State University.

According to the office of Naval research, the flight testing to evaluate UAS capabilities will commence at the Stennis Space Center in coastal Mississippi in May and continue through to June. One of the features planned to evaluate are drone-mounted lasers that can measure water depth from the air, known as Light Detection And Ranging technology (LIDAR).

LIDAR measures the distance to a target by shining a laser light beam on the target, it is the same technology being used by law enforcement agencies now, in replace of radar guns, to measure the speed of a moving vehicle.

The drone in use for the test is called the Outlaw SeaHunter, developed by Griffon Aerospace in Huntsville, Alabama. The twin propeller drone has a 16-foot wingspan and a length of 9.9 feet, according to Griffon Aerospace. With a payload capacity of 90 pounds, the drone can fly for over four hours and over eight with an external fuel tank.

SeaHunter is the most capable member of Griffon’s unmanned aerial vehicle (UAV) family, it is designed as a cost effective, reliable, Class III Multi-engine platform. SeaHunters are currently being used by military, universities, and research agencies for training, testing, data collection, and system R&D.

The demonstration of the LIDAR technology will be a short-term project, so there won’t be a permanent presence of the Navy. That being said, it is suggested that the research associated with the project could lead to a better understanding of coastal ecology and wetlands ecology.

To see whether your company can take advantage of the R&D tax credit, speak to one of our expert advisers at Swanson Reed.