The health industry has experienced a huge rise in the demand for plant-based alternatives over recent years. According to a study done by Good Food Institute, plant-based food options are growing in sales twice as fast as overall food sales with a 27% increase over the last year alone. In 2020, plant-based alternatives became a $7 billion market which was a massive leap from the $5.5 billion industry it was in 2019.
With the amount of growth occurring in the plant-based food market, many food and health companies are now conducting research and development to make sure their consumers are receiving quality products and meeting other expectations. These R&D activities can qualify many of these companies for important and lucrative tax credits.
What Types Of Plant-Based Alternative Activities Would Qualify For R&D?
Because the introduction of plant-based and other food alternatives has been a recent development in the health and food industry, there are vast opportunities when it comes to research and development and the tax credits that go along with that.
Here are just a few of the activities that may qualify for R&D credits:
- Using food science to improve plant-based taste so it’s a comparable alternative to meat, cheese, eggs, etc.
- Performing test and research to make sure food alternatives are providing consumers with the supplements and nutrients they need
- Developing technology that is available for food ingredient design and processing
- Creating food alternatives that have consistent and clean textures
- Creating food alternatives that remove artificial additives and reformulate food recipes
How Can A Company Break Down What Counts As R&D
If you’re still unsure about whether or not your company can receive R&D tax credits, there is a simple way to find out. A “4-Part” Test was created for businesses to determine whether or not the tasks they are actively performing in their day-to-day count as R&D. This test states that the activity must:
- Improve the quality, function, or reliability of a process or product
- Remove ambiguity or uncertainty in the development or improvement of a production process
- Must involve systematic processes
- Must be technological in nature
How Can I Claim These Credits For My Company?
If you think that your company is able to qualify for research and development tax credits, our team of tax experts at National Tax Group can help you receive them.
We have assisted many companies in obtaining these credits by creating and providing the needed documentation while walking through all your company’s activities. Call us at (561) 257-3436 and set up your assessment with our tax specialists today.