Sustainable Packaging (Hemp-Based)

Packaging has long been a challenge for companies who want to align their brand with “environmentally friendly”. With the passing of the 2018 Farm Bill, the hemp bioplastics industry has emerged as an alternative to fossil fuel-based plastics, which can take up to 1,000 years to decompose compared to six months for hemp-based materials. With a global focus on reducing plastic consumption, waste, and pollution, there is a push to develop hemp-based packaging materials, novel composites, and paper products. The research and development (R&D) involved in this industry is substantial. If your company invests in innovation, it could be eligible for significant tax refunds and credits by claiming the R&D Tax Credit.

The R&D Tax Credit is an activities-based credit. Employee wages, raw materials and supplies, and third-party contractor costs associated with R&D activities are considered qualified research expenses (QREs). Companies can receive refunds of up to 22% of total QREs through federal and state tax credits, depending on the state in which your business operates.

Example activities that qualify:

• Experimenting with novel hemp-based polymers
• Developing new child-proof, hemp-based containers and products
• Designing and engineering products to improve shelf-life capabilities
• Creating prototypes or first articles
• Testing a new product for durability, biodegradability, and/or waste byproducts
• Creating new software to track raw materials and suppliers

Do you have these job titles on your payroll, or do you hire third-party contractors to do these jobs?

• Biochemists
• C-Suite
• Chemists
• Computer-aided Design (CAD) Personnel
• Supply Chain Managers
• Consultants
• Director of R&D
• Mechanical Engineers
• Packaging Engineers
• Plastics / Polymer Scientists
• QA/QC Personnel

Use our Hemp Tax Calculator to estimate your potential benefit, and partner with HempTax to claim your benefits with no up-front costs. Contact one of our experts today.