Industry firms may qualify for R&D credit

Matt Griswold

Published: February 12, 2007 6:00 am ET

Related to this story

Topics In Print

A little-known tax exemption that plastics processors and toolmakers might qualify for is the research and development tax credit - a credit that could free up $100,000 for a small company and as much as $300,000 for midsize companies.

``It's an area of tax that is extremely subjective and complex. A lot of small to midsize [certified public accountant] firms aren't familiar with it or [don't] know how to effectively apply it,'' said Scott Schmidt, principal at Black Line Group, a Minneapolis-based firm that specializes in helping customers qualify for the tax credit.

The credit has caught the attention of Society of the Plastics Industry Inc. officials in Washington.

President Bush signed into law the Tax Relief and Health Care Act of 2006 in December, which extended the credit. Catherine Randazzo, SPI chief operating officer, said in a telephone interview that manufacturers need to contact their senators and representatives to make it known in Washington that these sorts of tax-savings opportunities are important to the manufacturing community.

``It takes a grass-roots effort to help convince lawmakers to make this happen,'' she said.

Consulting group Plante & Moran PLLC of Southfield, Mich., also assists companies with the tax credit.

``We have helped many of these companies claim R&D annual credits of $35,000-$450,000 for activities such as mold design and testing, design and development of process automation and lean manufacturing,'' said Steven Everson, Plante & Moran's ``tax solutions'' director.

Everson said most manufacturing companies can qualify for some level of R&D credit.

``We work with a lot of middle-market manufacturing companies that either did not know about the R&D credit or didn't believe they would qualify,'' said Amy Forester, a certified public accountant and engineer with Plante & Moran.

Deb Crumley, Black Line's director of R&D tax credit work, said companies that do a lot of custom work may qualify for the credit, which can mean substantial savings.

``We won't get involved unless we can generate at least $80,000-$100,000 in immediate cash,'' Schmidt said.

Tom Nagelkerk, finance director for Cedar Springs, Mich.-based injection molder CS Manufacturing Inc., said the credit ``is certainly something that every processor should look into.''

``We were able to go back three years, filing amended returns,'' Nagelkerk said.

``The savings was in excess of $100,000. And it can be significant going forward. We're looking at saving anywhere between $50,000 and $100,000 for each of our three companies, annually,'' he said.

* * *

www...

Black Line Group provides a 10-question "assessment tool" designed to help companies determine whether they qualify for the credit. The tool is available at www.blacklinegrp.com.


Comments

Industry firms may qualify for R&D credit

Matt Griswold

Published: February 12, 2007 6:00 am ET

Post Your Comments


Back to story

Market Reports

Market Data Book - Rankings & Lists

A one-stop download of Plastic News' exclusive annual lists and processor rankings containing essential data including sales, employees, end markets, materials and more.
EXCLUSIVE EXCEL FEATURE: full mailing address details for available plant locations.

Learn more

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report provides analysis and discussions of economic and political conditions, market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as strategies being implemented by thermoformed packaging companies. In addition, there are reviews of 25 leading thermoformers in the packaging segment, assessing their growth initiatives and performance metrics over 10 years.

Learn more

Mold Making and Tooling Review and Outlook 2014 North America

This report provides in-depth analysis of the mold and toolmaking market for North America, including discussions of trends, opportunities, threats, the latest developments in production and labor and equipment trends impacting moldmakers.

Learn more

Upcoming Plastics News Events

May 6, 2014 - May 8, 2014Plastics in Medical Devices 2014

May 12, 2014 - May 12, 2014Plastics News Brazil Pharma Summit

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

February 3, 2015 - February 7, 2015Plastics News Executive Forum 2015

More Events