Boat builders solve technical problems every day: how a hull behaves at speed, how a new material holds up in salt water, how to fit more into a layout without losing strength. Much of that work can qualify for the federal R&D credit, even though nobody on the floor calls it research.

Work that often qualifies

• Designing a new hull shape or testing a change to an existing one

• Trying a new material, resin or core and recording how it performs

• Developing a custom layout or system that has to meet size, weight and strength limits

• Building a prototype or test model and revising it after trials

• Creating tooling, molds or fixtures that did not exist before

• Developing a better build method to cut weight, waste or rework

Work that usually does not

• Routine builds to a finished design

• Repairs and refits with a known fix

• Cosmetic changes such as finishes and colors

The test to apply

The credit asks four questions. Is the work meant to create or improve a product or process? Is it technological in nature? Is there uncertainty about the design or method? Do you test and refine through a process of experimentation? Work that answers yes to all four can qualify. See the four-part test for detail.

What the four questions look like on a boat

• Permitted purpose: a hull that is lighter, faster or more stable, or a build method that is cheaper or more repeatable

• Technological: the work relies on engineering, naval architecture or materials science, not on style

• Uncertainty: you do not yet know whether a design will hold its weight, trim or strength targets, or whether a material will hold up

• Experimentation: you model, build, test, change and test again, whether on the bench, in a tank or on a sea trial

Problems Gulf Coast builders often work through

• Shallow-water performance and draft limits

• Corrosion and fatigue in a salt and heat environment

• Weight and balance when adding systems to a hull

• Storm and storage considerations for design and fastening

These are examples of the kind of technical problem that can qualify when you work through them by testing. Whether a specific project qualifies depends on what you did and what you recorded.

A note on custom and customer-funded work

Many builders work to a customer's order. Whether that work qualifies depends on who carries the risk and who keeps the rights to the result under the contract, so the agreement matters. We look at it project by project.

Costs that count

• Wages for designers, engineers and builders on the qualifying work

• Materials and supplies used in prototypes and testing

• A share of outside contractor costs for qualifying work

What to have ready

• A list of new designs, builds or methods from the last few years

• Who worked on them and about how much time they spent

• Sketches, build notes, sea trial results or photos

• Payroll and material totals for those projects

Many Gulf Coast builders are small, owner-run companies, and size does not decide it. Start with a free 5 to 10 minute screening, or see the boat builders guide for more examples.