December 7, 2018

Ask The Keg Pros: How Can My Brewery Maximize Our Beer Tax Credits?

As the end of the year draws near, so does the deadline for breweries to file tax claims.

There are two opportunities where brewers can claim tax refunds: Research and Development (R&D), and the disposal of bad or unsalable beer.

Research and Development (R&D) Tax Credit

The first option for breweries is the R&D tax credit. The original idea behind the creation of the R&D tax credit was to provide companies who were willing to invest in improving their processes and developing new products with tax incentives, with the end result being that overall technology would improve across the country.

The best part about this tax credit is that it rewards risk – whether the initiative succeeds or not!

For the competitive craft beer world – which distinguishes itself by creating new beers with various flavor and aroma profiles – this is a huge incentive to get creative with brews.

One key factor for craft beer brewers to remember throughout the year is: Document everything! This makes the filing process easier and more expedited.

So, what types of activities qualify for the R&D tax credit? Here are some examples:

  • Testing of product ingredient combinations relative to new flavors or enhancements
  • Hopping techniques
  • Keg filling or treatment techniques
  • Ingredient processing techniques
  • Filtration methodologies
  • Brewing or bottling equipment
  • Developing new or improved product formulations or improved ingredient mixing methods
  • Developing new or improved prototype batches or improved preservatives
  • Preservative chemicals
  • Product designs to ensure consistency
  • Product designs to ensure shelf life or longevity
  • Product ingredient mixtures for desired flavor or aroma profiles
  • Adding new equipment pertaining to process improvement or new bottling/brewing equipment
  • Developing new or improved bottling and canning processes
  • Developing new or improved water recycling or waste management

Tax refunds for old or unsalable beer

There’s no reason to keep old or bad beer around. Brewers should maintain their brand integrity by disposing of unwanted and old beverages in a completely environmentally safe way with SLG’s EcoBev solution.

EcoBev is the answer to everything from out-of-date beer, labeling or packaging errors, a warehouse full of product that needs to be recycled, old seasonal beers that need to be disposed of, or a total recall. Brewers should think of EcoBev as a protection plan on their beer.

In the event product needs to be destroyed, SLG quickly (and discreetly!) picks up the product from the brewer’s distributor network and disposes of it. SLG follows all the proper disposal methods in compliance with the Environmental Protection Agency (EPA). If properly destroyed, this beer can be a tax claim. You should consult your brewery’s tax expert to make the final determination which tax refund, credits and/or filing strategy will work best for you.  Brewers can avoid hours of administrative burden and complicated paperwork with EcoBev and thus save valuable time. Through the use of an online portal, EcoBev provides brewers with real-time visibility of the status of the product destruction process. Also included is a detailed project library to electronically hold all necessary documents needed for tax and auditing purposes. Again, this is a process which makes filing super simple. Call the Keg Pros today and learn more about EcoBev: 800-987-5374.

Cheers to a happy and successful Brew Year!