People familiar with the workings of wineries and vineyards know they need to keep evolving with the ever-changing consumer demands, economical constraints and environmental concerns to stay competitive. Many wineries have either never heard of the Research and Development (R&D) tax credit or do not perceive what they do as scientific or experimental.
The actual truth is that a great deal of the activities wineries engage in qualify for the R&D tax credit. This was further solidified when the Internal Revenue Service (IRS) released new Treasury Regulation Sec. 1.174-2 on July 21, 2014, which specifically states in example 10 that a wine producer could claim research tax breaks for production costs association with a “different method of crushing the wine grapes” as it tests a new manufacturing process.
With this proclamation, there is truly no doubt that wineries can qualify for the R&D tax credit.