R&D Tax Credits: What the Aviation Maintenance Industry Should Know
R&D tax credits can help aviation maintenance take flight. While many companies are already performing eligible activities, identifying and documenting them according to government requirements can be challenging. Claiming the R&D tax credit can yield significant funding towards past and future innovation, but the activities must be properly positioned and supported for a claim to be accepted.
A recent study indicated that companies in the Aerospace and Defense industry are planning to spend a yearly average of 9% on R&D in the next two years. For a $100M company, this represents $9M of categorized R&D. Depending on the company’s location, this could represent over $1M in tax credits, and that does not include non-categorized R&D spend such as process improvement, internal software development, etc.
Therefore, companies that recognize the benefits of claiming the tax credit, and position and prepare their claim according to government requirements, will offset some of the costs associated with performing the type of innovation that is required for them to stay ahead of the competition. The rest will likely fall behind, succumbing to increasingly tight margins and losing market share as the cost of innovating across the entire supply chain increases. If they want to take flight, companies cannot afford to miss out on fueling their own growth along the way.