Agriculture - Specialty Tax Advisors

The Agriculture sector involves high capital and operating costs, environmental and conservation goals, innovation, and sustainability practices, all areas that are candidates for tax incentives.

Ideal Candidates:

Farms and ranches investing in new irrigation, sustainable farming
Renewable energy projects
Farm equipment upgrades
Agribusinesses (e.g., food processors, nurseries, forestry operations)

Here’s an overview of how Aerospace companies can benefit.

Research & Development (R&D) Tax Credits

Many agricultural innovations qualify—even if developed on a farm:

Developing new seed varieties or crop strains
Irrigation system enhancements
Organic pest control methods
Automation in planting, harvesting, or sorting
Grape cultivation & vineyard management
Fermentation & aging techniques
Sustainable practices
Process improvements
New product development

Benefit: Up to 10% of qualified R&D expenses in the form of a tax credit.

Cost Segregation

Agricultural facilities such as processing plants, cold storage, barns, or packing houses benefit from reclassification of building components:

Grain dryers, cold storage panels, lighting, fencing, etc.
Accelerates depreciation of certain assets from 39 or 27.5 years to 5, 7, or 15 years

Benefit: Increased cash flow and reduced tax burden early in a project’s life.

179D Tax Deduction

Large agriculture operations often include warehouses, processing facilities, and corporate offices:

Deductions for energy-efficient HVAC, lighting, and insulation upgrades
Up to $5.00 per square foot, including improvements made to government or co-op-owned ag buildings (designers can benefit too)

Benefit: Immediate tax deduction for building energy improvements.

What Services are Included?

45L Tax Credit

Applicable to housing provided to seasonal workers or farm employees:

$5,000 per unit for energy-efficient workforce housing
Must meet ENERGY STAR or DOE Zero Energy Ready standards

Benefit: Dollar-for-dollar reduction in tax liability for agricultural housing projects.

Section 263A (Uniform Capitalization Rules) & Fixed Asset Reviews

Applies to:

Vineyards, orchards, livestock operations, and food manufacturers
Identifies assets that can be expensed rather than capitalized
Reviews fixed asset ledgers for missed write-offs and partial asset dispositions

Benefit: Increases current deductions and improves tax compliance.

IC-DISC (Interest Charge – Domestic International Sales Corporation)

Export Tax Incentive for agriculture exporters of US products (e.g., grain, produce, equipment):

Allows certain profits to be taxed at qualified dividend rates rather than ordinary income rates
Useful for cooperatives, seed producers, and agritech exporters

Benefit: Permanent tax rate arbitrage for qualifying export income.

Form 3115

A Form 3115 - Application for Change in Accounting Method, allows businesses to request approval from the IRS to change their accounting method. This form might be required when making changes to claim various tax credits.

Changing Depreciation Method
Inventory Method
Accounting for Repairs vs. Capital Improvements

Benefit: Tax relief through audit protection, improved financial reporting accuracy, potential tax benefits, and compliance with IRS Regulations.

Payroll Tax Reduction Strategy

Companies with W2 employees will qualify for this tax credit program.

Proven ROI with significant Payroll Tax savings recognized on first payroll cycle
Eligible employees see an increase in net take-home pay
Zero upfront or out-of-pocket cost to employer or employee
Attract and retain top talent
Audit compliance

Benefits: Employer FICA Tax Savings is $56.80 per month or $681.60 per year per eligible employee. Employee FICA/State/Federal Tax Savings includes an approximate 3-4% increase in monthly net take-home pay.