Tax deductions for U.S.-based production activities.
Companies with production activities in the U.S. can potentially reduce their effective federal tax rate by up to three percent by claiming the domestic production activities deduction (“DPAD”) under Section 199 of the Internal Revenue Code. Though sometimes overlooked, these tax incentives are not limited to traditional manufacturers and can apply to companies in multiple industries, including:
- Software development, including Software as a Service (SaaS)
- Film and sound recordings
- Print media
- Engineering and architecture services
- Electricity generation
- Oil and natural gas extraction
BDO has been helping companies reduce their federal tax liability using Section 199 since it was enacted. We offer a partner-led team, a collaborative approach, and a deep understanding of the opportunity, including the most recent developments and technical issues.