Issue link: http://palletcentral.uberflip.com/i/921113
34 PalletCentral • November-December 2017 palletcentral.com ood packaging is seen as a high quality and cost-effective shipping platform option, and is widely accepted as an economical, sustainable and environmentally friendly product. With continued advancements in packaging and container design, and manufacturing distribution and processes, innovating wood packaging professionals using technology can potentially package federal tax savings too, in the way of the R&D tax credit. These credits are not limited to scientists and medical researchers. For example, companies that lease the PDS™ or other engineering software in their facilities, may qualify for the R&D tax credit. The permanent extension in 2015 made this credit more broadly available across industries and activities. What is the R&D Tax Credit? The R&D Tax Credit is a federal incentive designed to help companies that invest in innovation or rely upon technology, such as the engineering disciplines, to develop their products and processes. To qualify, research project activities must meet the definition of qualified activities defined in IRS Code §41. Projects that qualify must pass a four-part test by meeting the main criteria below: • The activity's purpose must be aimed at the development or improvement of a product, process, technique, formula, invention, or software application. • The activity must attempt to eliminate technological uncertainty present at the outset, concerning the capability, method, or appropriate design for developing or improving the business component. • The activity must be technological in nature, meaning it relies upon the hard sciences (e.g. engineering, biological science, chemical science, computer science); and • The activity must rely on a process of experimentation, which may include modeling, simulation, or systematic trial and error. Qualified costs include wages, supplies or materials used in the conduct of research, and contract research costs. In addition to the Federal Credit, many states have programs that mirror the Federal one, thus offering an additional opportunity. How Can Wood Packaging Professionals Benefit? Today a company that is using some form of technology to develop its products, services or manufacturing skills, is likely to qualify for R&D tax credits. Companies do not need patents or even an R&D department to qualify. In fact, the IRS continues to expand the definition of qualifying R&D. If your company designs and manufactures pallets and wood packaging, you are likely to be constantly improving your products and processes to remain competitive. You may be experimenting and developing alternative packaging designs, creating efficiencies in production and distribution, or developing and implementing advanced technology. Pallet manufacturing companies and sawmills that use technology, such as the Pallet Design System™ (PDS), log W Packing in Tax Credits How the R&D Tax Credit is Impacting Wood Packaging Professionals By Jill Neuvirth BUSINESS