Tax Incentives: Agriculture Companies

AGRICULTURAL INDUSTRIES

 

Many agricultural businesses are often unaware of whether they qualify for certain government tax incentive programs, or they may believe that such programs do not apply to agricultural companies. Even those that are aware often fail to capture the full extent of tax credits to which they are entitled.

For example, many taxpayers mistakenly believe you must have a PhD or laboratory scientists performing qualified research activities to claim the R&D tax credit under the U.S. tax code. However, this is not true. If your business has produced new and/or improved products and/or processes concerning enhanced agricultural products, formulations, harvest processes to increase yields, reduce costs (e.g. chemical or fertilizer waste), or other improvements to the efficiency of your operation, or adhere to government regulations (OSHA, FDA, EPA standards, etc.) there may be an opportunity your company could benefit from an R&D Tax Credit study.

Below outlines various federal tax incentives which may be applicable to your agriculture operations as a cash saving benefit and/or refund opportunity. If any of these credits appear relevant to your business, let AndreTaxCo help you claim the credits that you deserve!

Research and Development Credits 

Hiring Credits & Incentives

Alternative Fuel / Vehicle Industry Credits

Alcohol Industry Credits

Low-Income / Targeted Geographical Zone Credits

Building Renovation & Modification (Disability Access) Credit & Incentives

  • Rehabilitation Credit (IRC § 47) – renovation of qualified rehabilitation building(s) (e.g. historical properties) credit

  • Disabled Access Credit (Form 8826) under IRC § 44(a) in the case of an eligible small business (as defined in IRC § 44(b)) 

    • ​See also "Barrier Removal Tax Deduction" pursuant to IRC § 190

      • ​The Architectural Barrier Removal Tax Deduction encourages businesses of any size to remove architectural and transportation barriers to the mobility of persons with disabilities and the elderly. Businesses may claim a deduction of up to $15,000 a year for qualified expenses for items that normally must be capitalized.

      • Businesses claim the deduction by listing it as a separate expense on their income tax return. Also, businesses may use the Disabled Tax Credit and the architectural/transportation tax deduction together in the same tax year, if the expenses meet the requirements of both sections.

      • To use both, the deduction is equal to the difference between the total expenditures and the amount of the credit claimed.

      • See IRS Publication 535 (2018); 26 U.S. Code § 190 (expenditures to remove architectural and transportation barriers to the handicapped and elderly).

Business Benefit Plan Credits

Railroad Industry Credits

Note, many of these listed federal credit incentives have comparable state tax incentives that are often substantially similar to calculate or claim, subject to state specific procedural rules and regulations.

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