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1. Wine Industry
Research and
Development
(R&D) Tax Credits

2. DISCLAIMER
This presentation and these materials are designed to provide information in regard to the subject matter
covered. This presentation and these materials are provided solely as a teaching tool, with the
understanding that Stephen Moskowitz, Moskowitz LLP, and the instructor are not engaged in rendering
legal, accounting, or other professional service and that they are not offering such advice in this
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3. What Activities Qualify for
the R&D Tax Credit?
▪ Research Activity Conducted in the US
▪ Develop or design new and innovative products or
processes
▪ Improve existing products, processes, or prototypes
▪ Review the potential of several alternatives or
methods during the development or improvement
process

4. Research Activities Must Meet 4-Part Test
Technical
Uncertainty
Process of
Experimentation
Technological
In Nature
Qualified
Purpose
1.
3.
2.
4.

5. The credit is 20% of the company’s current year
qualified research expenses over a base
amount.
Calculate R&D Tax Credit:
Traditional method
It’s the product of a fixed-base percentage and
the average annual gross receipts of the
company for the prior four tax years.

6. Alternative Simplified
Credit Method
▪ Calculate the company’s average qualified
research expenses (QREs) for the past three years
▪ Multiply that average by 50%
▪ Subtract the result of Step 2 from the company’s
current year QREs
▪ Calculate the credit by multiplying the result of
Step 3 by 14%.

7. Identifies and quantifies the major soil resources such as
the soil type, soil fertility, soil chemical hazards, water
holding capacity, amounts and depths to rock.
Soil Suitability Assessment
for Vineyard Development
▪ Grade
▪ Soil
▪ Water Conditions
Evaluation of geological pilot characteristics,
including:
Evaluation of geological characteristics, including grade, soil,
and water conditions may qualify for the R&D Tax Credit

8. Soil Assessment &
Vineyard Design
▪ Designing vineyard layout based on blocks of highly
uniform soil properties.
▪ Goal is to produce fruit of high quality from highly
uniform vine growth and fruit ripeness.
▪ Great wines are not made with grapes that have a
broad spectrum of ripeness.
▪ Research regarding block boundaries, tillage depth,
tillage implements, pre- and post-tillage soil
amendments, row widths, vine density, row
orientation, trellis type, varieties, clones, and
rootstocks may qualify for the R&D Tax Credit.

9. Growing
▪ Development and testing of new and improved strains of
grapes may qualify for the R&D Tax Credit
▪ Gene culture research within the wine industry aims to
enhance the typical characteristics of grapes
▪ Development of new yeast strains
▪ For example: a new yeast with the ability to degrade
malic acid. Excess malic acid can cause an imbalance
between sugar and acid content, something that is not
desired in quality wines
▪ Producing wine with more resveratrol in it. Resveratrol
occurs naturally in red grapes and is thought by many to
be the compound that promotes heart health and
prevents blood clots leading to heart attacks and strokes

10. Harvesting
▪ Reliable amount of sugar to yield sufficient alcohol to
preserve the resulting beverage
▪ Requisite acids, esters and tannins to make natural,
stable wine
▪ Grapes must be harvested at the precise time,
preferably when physiologically ripe
▪ Development of new systems, structures, or techniques
to improve harvesting process will qualify for the R&D
Tax Credit

11. Crushing and Pressing
▪ Mechanical pressing has also improved the quality and
longevity of wine
▪ Development of automated sorting and crushing
processes or equipment
▪ Development of new methods or systems for crushing,
de-stemming, and pressing processes

12. Fermentation
▪ Natural yeast is sometimes unpredictable
▪ Developing new strains of yeast may create a more
predictable wine
▪ Sweet wine is produced when the fermentation process
stops before all of the sugar has been converted into
alcohol
▪ Development or new or improved fermentation methods,
processes, or techniques may qualify for the R&D Tax Credit
▪ Testing and evaluation of various fermentation methods to
improve wine quality, flavor profiles, or economic
efficiencies may qualify for the R&D Tax Credit

13. Clarification
▪ Racking or siphoning wines from one tank or barrel to the
next in the hope of leaving the precipitates and solids called
pomace in the bottom of the fermenting tank
▪ Filtration can be done with everything from a course filter
that catches only large solids to a sterile filter pad
▪ Fining occurs when substances are added to a wine to
clarify them
▪ Development of new clarification methods or techniques,
including improvements fining and filtration processes may
qualify for the R&D Tax Credit
▪ Evaluation of various filtration methods to improve wine
quality may qualify for the R&D Tax Credit

14. Aging and Bottling
▪ Wine may be bottled immediately: Beaujolais Nouveau
▪ Additional aging: Napa Valley Cabernet Sauvignon
▪ Aging Choices: Bottle, stainless steel or ceramic tanks,
large wooden ovals, or small barrels
▪ Development of new or improved bottling and packaging
processes may qualify for the R&D Tax Credit
▪ Design and development of wine cave improvements may
qualify for the R&D Tax Credit

15. Spoilage and Prevention
▪ Spoilage is a serious concern for all wine makers
▪ Spoilage Prevention Developments may qualify for the R&D
Tax Credit
▪ Ultrasound technology to send ultrasound waves through a
liquid and create small bubbles
▪ The cavitation process creates high temperature pressure
zones which cause breakdowns in microbial cell walls
▪ Microwave technology can be used to kill microorganisms
from oak barrels
▪ Using older barrels is sometimes a style choice since older
barrels create a more delicately oaked wine

16. Contact the legal team
at Moskowitz LLP for a
free consultation today.
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