US R&D Tax Credits support 3D Printing for changing jewellery industry

With the growing introduction and use of 3D printing, the jewelry industry has seized the opportunity to produce quality and customizable designs at more affordable prices. According to theĀ National Jeweler, 956 retail jewelers, wholesalers, and manufacturers closed in 2015. This number increased to 1,564 in 2016, marking a 64% decline in jewelers throughout North America. 3D printing can benefit the changing industry, since the technology enables jewelers, manufacturers, and designers to test with patterns, colors, and designs, which, in the past, was a more timely process. 3D printing offers a new way to produce jewelry that is not as expensive or time-consuming, but that still maintains a high level of quality. With substantially reduced retail distributors, new 3D printer-based jewelry can sell directly to consumers via the internet.

The Research & Development Tax Credit

Enacted in 1981, the federal Research and Development (R&D) Tax Credit allows a credit of up to 13 percent of eligible spending for new and improved products and processes. Qualified research must meet the following four criteria:

  • New or improved products, processes, or software
  • Technological in nature
  • Elimination of uncertainty
  • Process of experimentation

Eligible costs include employee wages, cost of supplies, cost of testing, contract research expenses, and costs associated with developing a patent. On December 18, 2015 President Obama signed the bill making the R&D Tax Credit permanent. Beginning in 2016, the R&D credit can be used to offset Alternative Minimum Tax and startup businesses can utilize the credit against $250,000 per year in payroll taxes.

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