Issue link: http://read.dmtmag.com/i/369547
onsumer expectations are changing, and with them, the wine industry itself. To stay competitive, wineries must respond quickly to changing preferences, regardless of wheth- er demand comes as a long-term consumer behavior or a pop-culture fad. Uno- aked wine, compostable packaging, sustainable farming, lower alcohol content, and vitamin additives are just a few of these trends. In the wine industry, research and develop- ment (R&D) has generat- ed countless new products, s p a w n e d d r i n k i n g t r e n d s , improved manufacturing and distribution, and revolutionized and transformed wine qual- ity. Additionally, many winer- ies have focused their efforts on developing new packaging that uses environmen- tally friendly materials BY CAROLYN DRISCOLL JD, LL.M and satisfies sustainability efforts through energy efficiency. All this innovation can be expen- s i v e . F o r t u n a t e l y, t h e f e d e r a l government (and many state gov- ernments) recognize that, and in response, provide R&D tax credits: a dollar for dollar offset against tax- able income for qualified activities and expenses. Taking advantage of this credit can mean your business has more money to improve its manufacturing line, hire additional employees, or create innovative products. At nearly $10 billion a year, the R&D tax credit is one of the big- gest tax incentives available, and it can save companies in the wine industry hundreds of thousands of dollars. Yet many companies aren't aware of the credit, and those that are aware aren't taking full advan- tage of it due to common miscon- ceptions about its applicability to their operations. Businesses that fail to claim the R&D credit often do so because of confusion regarding Consumer Trends Can Turn into Tax Savings You might qualify for research and development credits 7 4 V I N E YA R D & W I N E RY M A N A G E M E N T | S e p t - O c t 2 014 w w w. v w m m e d i a . c o m