Charles R. Goulding and Preeti Sulibhavi consider their company’s clients’ new ways of conducting business in today’s changed environment, and where to incorporate 3D printing.
When word of a new virus outbreak hit, many companies carried on business as usual in the months that followed, presuming it was a short-term event. Now, confronting a decidedly long-term event, we are seeing many of our clients revamping their business models and marketing programs. Here are some of the things we see our clients doing:
1. Our lighting clients have quickly embraced new UVC lighting technologies.
2. Our HVAC clients are installing higher-performance filters and focusing on advanced outdoor air recovery systems.
3. Our machine shop clients are replacing work typically done for Boeing with work for General Dynamics Electric Boat and other defense contracting, in addition to looking for product lines to replace job shop work.
4. Our architecture clients are shifting from commercial to suburban and vacation home remodeling.
5. Our bicycle shop clients are scrambling to find extra independent contractor repair technicians for the busier-than-usual weekends.
6. Our injection molding clients are making plastic flower planters to be used as privacy barriers at restaurants with newly erected outside dining areas.
7. Our prepared airline meal clients are servicing schools and hospitals.
8. Our lumber clients are busy supplying lumber for social distancing measures and new home construction.
9. Our car dealer clients are converting non-vacant restaurant and office buildings in more visible locations to car dealerships and repair shops.
10. Our 3D printing clients are finding alternative marketing strategies to replace trade shows and hopefully, with the Fabbaloo team’s help, identifying a wider range of technologies to utilize and new customer applications.
Innovation related to new and improved products and processes may be eligible for R&D tax credits.
The Research and Development Tax Credit
Whether it’s used for creating and testing prototypes or for final production, 3D printing is a great indicator that R&D Credit eligible activities are taking place. Companies implementing this technology at any point should consider taking advantage of R&D Tax Credits.
Enacted in 1981, the now permanent Federal Research and Development (R&D) Tax Credit allows a credit that typically ranges from 4%-7% of eligible spending for new and improved products and processes. Qualified research must meet the following four criteria:
- Must be technological in nature
- Must be a component of the taxpayer’s business
- Must represent R&D in the experimental sense and generally includes all such costs related to the development or improvement of a product or process
- Must eliminate uncertainty through a process of experimentation that considers one or more alternatives
Eligible costs include US employee wages, cost of supplies consumed in the R&D process, cost of pre-production testing, US contract research expenses, and certain costs associated with developing a patent.
On December 18, 2015, President Obama signed the PATH Act, making the R&D Tax Credit permanent. Beginning in 2016, the R&D credit has been used to offset Alternative Minimum Tax (AMT) for companies with revenue below $50MM and, startup businesses can obtain up to $250,000 per year in payroll tax cash rebates.
We have been amazed by the resilience and ingenuity of many of our clients. We particularly enjoy it when their new business direction involves 3D printing.