Texas Technology Companies Receive Big Benefits From the R&D Tax Credit
In the past few years, Texas has seen the largest growth in population compared to any other state with more 370,000 people relocating to Texas in 2013 alone. Five of Texas’ cities including Dallas, Fort Worth, San Antonio, Austin and Houston are in the top 20 fastest growing metro areas in the United States. Due to the growing Texas population and its technology-driven residents, the R&D tax credit, both federal and state, can provide tremendous benefits for Texas businesses and the economy.
Which Companies Have Benefited So Far?
Two telecommunication and media related companies in Texas have seen large numbers in tax credits in recent years. Texas Instruments, an electronic based company which designs and creates semiconductors and is based in Dallas, secured $58 million in a tax credit for the 2011 fiscal year which resulted in $692 million owed. GenBand Inc, a telecommunications technology company that is based in Frisco, has 700 of its 1,700 employees conducting R&D. GenBand has previously recorded up to $8,000 per worker in tax credits for research and development, meaning the tech company could potentially earn up to $5.6 million in R&D credits. That is a lot of dollars to put back in your business instead of handing over to the government.
This all sounds great, but where do I begin?
The R&D tax credit rewards companies who design, manufacture, develop, innovate or improve new products or processes. It is important to know which type of activities satisfy the IRS’ requirements for R&D. After you familiarize yourself with the 4-part test, determine your qualifying research expenses (QRE’s) and consult with a tax specialist before proceeding. To better understand which activities qualify for the credit, please check out our eligibility page and contact Texas R&D Tax Credit Solutions advisers for more information.