Capital Investment Credits & Incentives
Improve cash flow related to real estate assets and offset federal, state and local tax liabilities
Uncover opportunities for your next capital investment
Investment tax credits and incentives are available to support capital-intensive projects of all types.
As businesses invest in growth, expansion, relocation, acquisitions, or redevelopment, identifying available tax incentives can help lower project costs, improve cash flow, and increase access to capital.
Whether you’re investing in new property or other real estate assets, pursuing merger and acquisition activity, expanding operations, or relocating facilities, state and local programs may help support your investment.
Our multidisciplinary team of site selection, engineering, construction, and tax professionals offers a full-service approach to tax planning, bringing together direct involvement from senior professionals, industry knowledge, and technology-enabled analyses to help identify opportunities and support more informed investment decisions.
We offer fixed asset services, cost segregation analysis, a New Markets Tax Credit survey and support for discretionary incentives, enterprise zone programs, and opportunity zone planning to help you determine eligibility and pursue available programs with greater confidence.
State and Local Credits and Incentives
Many state and local governments offer statutory tax credits and discretionary incentives to encourage business capital investment. The most common programs are investment tax credits and property tax incentives.
Investment tax credits are generally available to manufacturers that make qualified capital investments in new equipment. These credits may be available in some states including Colorado, Connecticut, Georgia, Massachusetts, New York, Oklahoma, South Carolina, and Tennessee. Investment tax credits can help companies save between 1% and 10% of qualified costs.
Companies making capital investments should also explore available property tax incentives before investing. Many cities and counties may abate a portion of future taxes for qualified investment. These incentives are commonly found in local jurisdictions in states including Michigan, Tennessee, and Texas. Property tax abatements can provide significant above-the-line savings over several years.
Cost Segregation Analysis
Cost segregation can help businesses improve cash flow by identifying building-related assets that may qualify for shorter depreciation recovery periods. For newly constructed, acquired, renovated, or expanded facilities, an engineering-based study may identify assets eligible for accelerated depreciation.
You may benefit from a cost segregation study if you have:
- Constructed, acquired, renovated, remodeled, or expanded commercial or residential real estate
- Placed property in service in the current or a prior year
- Completed projects with significant building systems, site improvements, tenant improvements, or specialized equipment
- Current or anticipated taxable income that could benefit from accelerated depreciation planning
BDO’s Fixed Asset Advisory Services team combines engineering, construction, and tax experience to evaluate project costs, classify assets, and prepare documentation designed to support tax positions. Our professionals apply engineering and technical judgment to help identify depreciation opportunities, evaluate bonus depreciation considerations, and maintain documentation that supports IRS examination readiness.
Cost Segregation Calculator
Explore our Cost Segregation Calculator to estimate whether certain assets may qualify for accelerated depreciation and whether a study may provide a meaningful tax benefit.
Fixed Asset Management
As businesses invest in facilities, equipment, technology, and property improvements, fixed asset decisions can affect current deductions, depreciation timing, state tax reporting, financial records, and future dispositions. A fixed asset review can help organizations evaluate whether assets are properly classified, capitalized, depreciated, and documented under current tangible property and asset disposition rules.
BDO helps organizations manage fixed asset activity across the asset lifecycle, from additions and improvements to retirements, transfers, dispositions, and tax reporting. We help clients align fixed asset records with tax requirements, identify potential repair and maintenance deductions, evaluate depreciation elections, and support consistent documentation for federal and state purposes. Many organizations also choose to outsource part or all of their fixed asset management function to reduce administrative burden, improve consistency, and gain access to dedicated tax depreciation experience. BDO can help maintain tax depreciation schedules, reconcile fixed asset records, track additions and dispositions, and support recurring depreciation calculations, allowing internal teams to focus on operations while helping improve accuracy, documentation, and compliance across the asset lifecycle.
Our fixed asset management services help organizations:
- Assess and document bonus depreciation eligibility, including placed-in-service and acquisition-date considerations
- Classify, reconcile, and depreciate fixed assets for federal and state tax purposes
- Review additions, improvements, repairs, maintenance costs, retirements, transfers, and dispositions
- Model depreciation elections, tax accounting method changes, and future-year tax impacts
Cost Segregation & Fixed Asset Management Frequently Asked Questions
Cost segregation is a tax planning strategy that identifies certain building-related assets that may qualify for shorter depreciation recovery periods, such as 5-, 7-, or 15-year property rather than 27.5- or 39-year property. Accelerating depreciation may increase near-term deductions and improve cash flow.
Cost segregation may benefit businesses that construct, acquire, renovate, remodel, expand, or improve commercial or residential real estate. It may also apply to prior-year projects through an accounting method change, depending on the facts and circumstances.
A fixed asset review evaluates how assets are classified, capitalized, depreciated, and documented for tax purposes. It may help businesses identify depreciation opportunities, repair and maintenance deductions, disposition issues, and recordkeeping improvements.
Cost segregation is often one component of broader capital investment planning. Reviewing depreciation, incentives, credits, placed-in-service timing, asset classification, and documentation together can provide a more complete view of the tax impact of a project.
Evaluating fixed asset treatment during a capital project can help businesses address capitalization, depreciation, bonus depreciation eligibility, repair and maintenance deductions, and disposition planning before records are finalized.
Yes. Businesses often review tax credits, discretionary incentives, cost segregation, depreciation elections, and fixed asset treatment together to better understand the full tax impact of a capital project.
New Markets Tax Credit
The New Markets Tax Credit program (NMTC) is designed to stimulate investment and economic growth in low-income communities.
For businesses in distressed communities, this program offers:
- A federal tax credit program to attract private capital
- Access to flexible and affordable financing with forgivable loan aspects
- Potentially lower interest rates, decreased origination fees, higher loan-to-values and lower debt coverage ratios
BDO provides end-to-end advisory services to help qualified low-income community businesses secure the NMTC benefit. We work directly with community development entities (CDEs) across the country, guiding you through the entire process so you can focus on your community development project.
NMTC Program
The NMTC program helps businesses finance qualifying investments in low-income communities through tax-credit-subsidized funding. Get answers to frequently asked questions about eligibility, project requirements, allocation, and how businesses can benefit from the program.
Business Incentives & Tax Credits Insights
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