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Industrial properties like manufacturing facilities, logistics centers, and warehouses aren’t just workhorses of the economy—they’re also prime candidates for substantial tax incentives tied to building improvements.
If you're upgrading systems like lighting or HVAC, improving insulation, or installing solar panels, there's a strong chance your investment qualifies for federal tax credits and accelerated depreciation. With the rising cost of capital improvements and a narrowing window to leverage bonus depreciation, 2025 is the year to take action.
Here’s how industrial property owners can reduce their tax burden and unlock immediate ROI:
What it is:
A federal tax deduction for energy-efficient upgrades to:
Key Highlights:
Example: A 200,000 sq. ft. logistics warehouse that installs high-efficiency lighting and HVAC could qualify for $300,000+ in deductions.
What it is:
A federal tax credit equal to 30% of the installed cost of qualifying renewable systems, such as:
Bonus Opportunities:
Example: An $800,000 solar array installed on a warehouse could yield a $240,000 ITC, plus accelerated depreciation, further reducing net costs.
What it is:
A tax strategy that reclassifies portions of a building (e.g., electrical, plumbing, finishes) into shorter depreciation categories (5, 7, or 15 years) rather than 39 years.
Why it matters:
Example: A newly built $4M industrial facility may reclassify $1.2M worth of components, resulting in six-figure tax savings in year one.
2025 is the final year to leverage 40% bonus depreciation under the phase-down schedule:
If you're planning capital upgrades or new development, now is the time to act. Bonus depreciation stacks with 179D and ITC to dramatically reduce taxable income.
In addition to federal programs, many states and municipalities offer:
These can often be layered with federal benefits for even more savings.
Taking advantage of these incentives starts with proper planning and documentation. To claim tax credits and deductions, you’ll need:
Partnering with a tax credit expert like TaxTaker ensures your claims are compliant, maximized, and hassle-free.
Whether you're upgrading a warehouse, developing a new logistics site, or installing solar on your industrial facility, there are real dollars on the table.
Book a call with TaxTaker today to explore how these strategies can reduce your tax bill and boost your bottom line.
Abby Massey is an expert in applying tax incentives for clean energy initiatives. With a B.S. in Civil Engineering from Purdue University and licenses in 46 states plus the District of Columbia, Abby offers significant expertise to her role at TaxTaker as the Vice President of Energy Incentives. Her experience includes certifying over 1,500 179D deductions, achieving more than $100 million in savings for clients. As a LEED Accredited Professional, Abby is dedicated to sustainable building practices. In her role at TaxTaker, she focuses on optimizing energy incentives for clients by leveraging her in-depth understanding of the 179D program, aiming to improve business sustainability and efficiency.
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