The fitness industry has seen a substantial increase in the demand for at-home workout equipment and classes since the start of the pandemic. Many fitness companies have had to pivot to account for this demand and perform research and development in order to provide consumers with the products they need.
With many gyms and studios shutting down during the pandemic, people have been incentivized to develop at-home workout routines and even with fitness facilities opening back up people are sticking with the convenience of home. In 2018, the global home fitness equipment market was worth an estimated 10 billion and experts are now forecasting a 6% increase between 2020 to 2027.
To embrace this demand, fitness companies, gyms and studios had to reinvent themselves. This includes developing equipment that is conducive to a home environment, putting their classes online, and taking into account how people can safely train without the presence of an instructor.
Another contributing factor to the growth of the industry is apps and other forms of digital services that people can connect to at home. Some of these apps have been developed to link to the equipment people are using at home while other apps provide resources, routines, and tips. Digital classes have also gained popularity and many studios and fitness instructors offer this as a service for people who do not want to come into the studios or gyms in person.
All of these improvements take time, money, and resources for fitness companies, especially those who didn’t already have digital plans or home-ready equipment in the pipeline. These developments can qualify companies for significant research and development tax credits. R&D tax credits are given to companies who undergo investments that contribute to growth in their industry. Because these are dollar-for-dollar credits, companies can directly offset any cost it took to develop equipment, apps, or digital programs.
At National Tax Group, we’ve helped companies in multiple industries with the process of claiming the full amount of credits they are owed. Give us a call at 561-257-3436 to set up a free assessment with our team today.