Morris Cost Seg Consultants

Manufacturing Facilities

Cost segregation for manufacturing facilities is a powerful tax strategy that helps owners accelerate depreciation and improve cash flow.

Morris Cost Seg Consultants Specialties

Unlock Hidden Tax Savings in Your Production Infrastructure

Manufacturing facilities represent some of the most complex and capital-intensive real estate investments in commercial property. From reinforced concrete floors designed to support heavy machinery to sophisticated electrical distribution systems that power production lines, every component of your facility serves a critical function.

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What most manufacturing property owners don’t realize is that a significant portion of these assets can be reclassified through cost segregation studies to accelerate depreciation, reduce tax liability, and dramatically improve cash flow.

Morris Cost Seg Consultants specializes in cost segregation for manufacturing facilities, helping businesses across the industrial sector identify and reclassify building components that qualify for accelerated depreciation schedules. Our engineering-based approach ensures maximum tax benefits while maintaining full IRS compliance, giving manufacturing companies the working capital they need to invest in equipment upgrades, workforce expansion, and competitive growth.

Understanding Cost Segregation for Manufacturing Properties

Cost segregation is an IRS-approved tax strategy that allows property owners to reclassify certain building components from 39-year real property to shorter depreciation schedules of 5, 7, or 15 years. For manufacturing facilities, this strategy is particularly powerful because production environments contain extensive specialized infrastructure that qualifies for accelerated depreciation.

Traditional accounting methods treat your entire manufacturing facility as a single asset depreciated over 39 years. However, a detailed cost segregation study identifies specific components—electrical systems supporting production equipment, process piping, specialized HVAC systems, reinforced flooring, and material handling systems—that can be depreciated much faster. This reclassification creates substantial tax deductions in the early years of ownership, deferring tax liability and freeing up capital for immediate business needs.

What Makes Manufacturing Facilities Ideal for Cost Segregation

Equipment-Intensive Infrastructure

Manufacturing facilities require robust electrical distribution systems with multiple voltage levels, backup generators, and dedicated circuits for production equipment. These power systems, including transformers, switchgear, bus ducts, and equipment-specific wiring, often qualify for 5 or 7-year depreciation rather than 39-year real property treatment.

Specialized Environmental Systems

Production environments demand precise climate control, air quality management, and ventilation far beyond standard commercial requirements. Process-specific HVAC systems, dust collection equipment, fume extraction, compressed air systems, and industrial exhaust systems can be reclassified for accelerated depreciation.

Reinforced Structural Elements

Heavy manufacturing requires enhanced structural capacity. Reinforced concrete floors designed to support machinery loads, equipment foundations, crane support structures, and mezzanines built for specific production processes often qualify for shorter depreciation periods when properly documented and allocated.

Process Piping and Distribution

Facilities with process piping for compressed air, natural gas, water treatment, chemical handling, or waste systems contain extensive infrastructure that supports production rather than the building itself, making these systems prime candidates for cost segregation.

Components That Qualify for Accelerated Depreciation in Manufacturing

Morris Cost Seg’s engineering team conducts thorough facility assessments to identify every qualifying component. In manufacturing environments, we consistently find substantial value in these categories:

Electrical and Power Distribution Systems

Production-related electrical infrastructure represents one of the largest opportunities for reclassification. This includes dedicated transformers, voltage step-down equipment, bus ducts, cable trays, conduit systems serving production equipment, disconnect boxes, distribution panels dedicated to manufacturing areas, emergency power systems for critical equipment, and equipment-specific wiring and controls.

Process and Production Systems

Manufacturing-specific mechanical systems often qualify for 5 or 7-year treatment, including compressed air generation and distribution, process cooling and chilling systems, vacuum systems, pneumatic conveyance equipment, material handling systems integrated with production, dust and particulate collection, fume extraction and industrial exhaust, and specialized fire suppression systems for production hazards.

Structural Elements Serving Production

Certain structural components designed specifically for manufacturing processes can be segregated, such as reinforced flooring for machinery loads, equipment foundations and isolation pads, crane support structures and rails, mezzanines for production support, loading docks and freight doors, and specialty coatings on floors and walls required for production.

HVAC and Environmental Control

Production environments require environmental systems beyond basic comfort that can qualify for accelerated depreciation, including process-specific air handling units, clean room HVAC and filtration, temperature and humidity control systems for production, industrial exhaust fans and ductwork, make-up air units for production areas, and specialty ventilation for chemical or thermal processes.

WHY CLIENTS CHOOSE MORRIS COST SEG CONSULTANTS

Engineering-Based Cost Segregation. Trusted Experience. Proven Results.

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Engineering-Based Methodology

We work with professional engineers who understand manufacturing systems, equipment requirements, and building codes specific to industrial facilities. This technical expertise ensures accurate identification and supportable classification of every component.

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Comprehensive Site Documentation

We conduct detailed physical inspections of your facility, photograph and document all systems and components, review original construction drawings and specifications, and interview facility managers and maintenance staff to understand system purposes and functions.

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Audit-Ready Reports

Every Morris Cost Seg Consultant study produces a comprehensive report that includes detailed engineering analysis and component identification, supporting documentation and cost calculations, IRS Form 3115 preparation for accounting method changes, and defensible methodology aligned with Tax Court precedents and IRS guidance.

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Industry Expertise

We have completed hundreds of manufacturing cost segregation studies across diverse sectors including automotive, aerospace, food processing, chemical manufacturing, metalworking, plastics and injection molding, pharmaceutical production, and electronics assembly.

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Maximized Savings

Our studies consistently identify 30-45% of building basis for reclassification in manufacturing facilities, significantly exceeding industry averages through our detailed engineering approach and manufacturing systems expertise.

Jim Morris

President | Senior Project Manager
Morris Cost Seg Consultants, LLC

Take Action: Claim Your Manufacturing Faclity Tax Benefits

Every year you wait to conduct a cost segregation study represents lost tax deferral and diminished working capital. Whether you purchased or constructed your manufacturing facility recently or years ago, cost segregation benefits remain available through IRS catch-up provisions.

Manufacturing facilities offer some of the most compelling cost segregation opportunities in commercial real estate. The combination of specialized electrical systems, process equipment infrastructure, enhanced structural requirements, and production-specific mechanical systems creates exceptional potential for tax savings.

Morris Cost Seg Consultants has helped manufacturers across the country unlock millions in tax benefits that fuel business growth, competitive advantage, and financial flexibility. Our engineering expertise, manufacturing industry knowledge, and commitment to maximum defensible benefits make us the trusted partner for industrial property owners seeking to optimize their tax position.

Contact Morris Cost Seg Consultants today to schedule your complimentary consultation and discover how much your manufacturing facility can save through professional cost segregation analysis. Your competitors are already leveraging this powerful tax strategy—it is time you did too?