Date 1/6/2000 -- Business granted deduction for QA standards Businesses will gain a new tax deduction for the costs of meeting international quality standards under a ruling by the Internal Revenue Service, which reversed its previous position. The decision Thursday involves a series of quality guidelines known as ISO 9001 that businesses around the world use for goods and services. Companies get certified by the International Organization for Standardization by documenting their processes so all current and future employees will continue to meet the same standards.
The National Association of Manufacturers, the National Federation for Independent Business and other organizations petitioned the IRS in 1998 to permit companies to fully deduct the costs of gaining certification in a single year, instead of spreading the costs out over multiple years. Obtaining certification, the groups said in a joint letter, "can be both expensive and time consuming, particularly for small businesses." An average cost estimate was placed at $60,000.
The IRS ruling says that costs incurred by businesses to "obtain, maintain and renew" the certification will now be fully tax deductible in one year, except for certain long-term costs such as creation of a company manual.
United States - IRS Deduction Ruling
IRS Revenue Ruling 2000-4
Implementation costs are tax deductible in the same year.
Registration costs and registration upkeep costs are tax deductible in the same year.
Internal man hours
Internal capital expenses
I have seen combined implementation / registrar costs as low as US$10,000 and as high as US$10+M.