When operating a distillery, you should seek every tax incentive that is available for your business. However, it could be difficult to determine for the owner of a distillery to determine all the tax incentives that apply to their company. Fortunately, distillery owners could seek help to claim their tax incentives. If you operate a distillery and you need assistance claiming tax credits for your company, you should consult with an experienced California accountant for distilleries as soon as possible. The Cook CPA Group is committed to providing our clients with the accounting services they need to manage their tax liability. Our firm is here to discuss the tax incentives that are available to distilleries in California.
Common Tax Incentives for Distilleries in California
Tax incentives for distilleries and many other industries are implemented for the purpose of promoting growth within an industry. Unfortunately, while many tax incentives could be claimed for the operators of a distillery, it is normal for taxpayers to be unaware of incentives that apply to their business. Making sense of the tax code to determine tax credits for your business could be a tedious task while you are trying to successfully operate your business. For this reason, the Cook CPA Group could help you manage your taxes to ensure that you claim all available tax incentives.
The following is a list of common tax incentives our California CPAs for distilleries could help you claim for your distillery company.
FICA Tip Tax and California Sales Tax Incentive
The Federal Insurance Contributions Act (FICA) tip credit provides some relief for distillery owners from federal taxes and even Social Security and Medicare taxes. Owners of a distillery may be able to claim a tax credit if they employ workers that earn tips as employers are required to pay taxes on tips. Specifically, if a distillery employee receives tips that exceed the applicable minimum wage rate, this would permit the taxpayer to claim the FICA tip credit.
Note, however, if a tip only raises the employee’s wages to minimum wage, this will not be enough to be eligible for a FICA tip credit.
A distillery owner in California may also be able to claim a state tax credit for a variety of materials that are used in the production of items needed for the distillery. Additionally, if the owner of a distillery needs to purchase machinery and other costly equipment to operate their business, these items may be used to claim a sales tax exemption.
Fuel Tax Incentive
As you are undoubtedly aware, the purchase of fuel is taxed by the federal government. When operating a distillery, it is common for owners to require fuel to operate machinery needed to create their products. Fortunately, using fuel in this manner may allow the distillery owner to claim a tax credit.
It is important to note that there may be different requirements depending on the type of fuel used by a distillery. For instance, if you would like a tax credit for propane, you would have to register as a company that uses propane for your business. However, ordinary fuel may not require this specific step to claim a tax credit.
R&D Tax Incentive for California Distilleries
A research and development tax credit (R&D) is utilized to encourage business owners to produce new products or to improve processes for traditional methods used in their industry. There are a number of ways that a distillery owner could claim an R&D tax credit. For example, the distillery may be able to use R&D credits to offset tax liability for payroll taxes. Specifically, if a distillery qualifies as a small business, the owner could offset up to $250,000 of payroll taxes.
Additionally, if a distillery does not completely utilize their tax credit in the year it was earned, the tax credit could be rolled over into another year for 20 years. Our California CPAs for distilleries could help you determine whether your business activities qualify you to claim an R&D tax credit.
There are many other tax incentives that a distillery owner could claim, such as utility exemptions or work opportunity tax credits. The Cook CPA Group knows that it could seem impossible to claim all tax credits that apply to your distillery, and we are here to address your concerns.
In some circumstances, our firm could help the owner of a distillery correct a previous tax return in order to claim a tax incentive that applied to their business. However, this process must be done within three years before the statute of limitations lapses on the tax return. Our firm could also help you resolve unfiled tax returns and other common tax matters.
Consult with Our California Accountants for Distilleries to Discuss How to Claim Your Tax Incentives
If you are the owner of a distillery in California, and you need accounting services to claim your tax incentives, you should work with an experienced California CPA for distilleries. At the Cook CPA Group, our skilled Sacramento accounting team has years of experience providing a variety of tax services for our clients, and we would be pleased to offer accounting services for California distilleries. You do not have to manage the taxes for your distillery without any help. To schedule a free consultation to discuss tax liability for your distillery, you should call the Cook CPA Group at (916) 432-2218. You may also use our website to schedule a free consultation with one of our experienced California accountants for distilleries.