Page 20 - Beverage Master February March 2020
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Craft Beverage
Increasing Brewery Cash Flow:
Craft Breweries and the R&D Credit
C raft brew popularity is at an all-time offset these costs in the form of R&D tax credits
for craft brewers engaging in “qualifying activities.”
high in the United States, with explosive
industry growth in the past five years.
in income taxes and, if applicable, payroll taxes,
According to the Brewers Association, R&D credits result in a dollar-for-dollar reduction
craft brewers now make up 98 percent of all U.S. providing cash flow for future investments. The
breweries. As new craft brewers continue to enter R&D credit applies not only to new product devel-
the industry and existing brewers look to keep up opment, but also to improvements to existing prod-
with recent trends, significant financial investments ucts and manufacturing processes. Importantly, the
must be made before the first brew can reach the activities need only be evolutionary to the organi-
consumer. Whether these costs are related to the zation, not to the industry as a whole, to qualify for
formulation of the brew, or how to produce or the credit.
package the brew, costs can be substantial.
Because the R&D credit is nonrefundable, startup
Fortunately, federal and state governments offer companies and other small businesses like craft
an often overlooked but valuable benefit to help breweries are often limited in their ability to claim
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