Building or expanding a manufacturing facility? Don't overlook this tax opportunity!

Every successful manufacturing project starts with a solid plan. From choosing the right site to designing an efficient facility and keeping construction on schedule, early decisions can shape the long-term success of your investment.

Now, those decisions may carry even greater financial significance.

A new tax provision allowing 100% expensing for Qualified Production Property (QPP) could substantially reduce the cost of qualifying manufacturing projects by accelerating depreciation on eligible portions of a facility.

If you're planning a new manufacturing building, expansion, or major renovation, understanding QPP can help maximize your return on investment. And by coordinating your project team early — including your design-build partner and tax advisor — you can help ensure your project is positioned to take full advantage of all available opportunities.

What Is Qualified Production Property (QPP)?

Qualified Production Property (QPP) is a new tax incentive that allows eligible manufacturers to immediately expense qualifying production facilities instead of depreciating those costs over the traditional 39-year schedule.

In other words:

Instead of waiting decades to recover the cost of constructing certain manufacturing buildings, qualifying businesses may be able to deduct much of that investment in the year the property is placed into service.

Why This Matters for Manufacturers

For companies investing millions into a new facility, accelerated depreciation can:

• Improve cash flow
• Lower current-year tax liability
• Increase available capital for equipment, hiring, or future expansion
• Improve overall project ROI

Plus, in many cases, tax strategy is one more factor that affects project timing. When you're already evaluating where to build, how large to build, and what features your facility needs, understanding available tax incentives like this can help shape smarter investment decisions.

Which Manufacturing Projects May Qualify?

Potentially eligible projects include:

• New manufacturing facilities
• Production plant expansions
• Facility additions
• Manufacturing campus developments
• Certain major renovations or production-related improvements

Many manufacturing facilities include both production and administrative functions. In these cases, the production spaces may qualify, but the office space and other non-production spaces generally will not.

Parts of a manufacturing facility that often qualify include production-related areas such as:

• Manufacturing floors
• Production lines
• Raw material storage
• Packaging areas
• Production support space
• Maintenance areas directly supporting manufacturing

Non-production areas generally DO NOT qualify. This includes administrative offices, showrooms, finished goods warehousing, general office space, and other non-production areas.

Ultimately, eligibility depends on IRS requirements and should be confirmed by your tax advisor.

When you work with an experienced design-build construction team like APPRO Development, we can help you clearly define how different spaces will function from the beginning of your project. Not only does thoughtful planning improve workflow and efficiency, but it can also make documentation easier when your tax professionals evaluate qualifying production areas.

Early Planning and Collaboration Matter More Than Ever

QPP isn't something to think about after construction is complete. Rather, it should be considered right from the beginning, when you’re choosing a site, determining building layouts and budgets, and scheduling your project.

This requires early collaboration between the owner, design-build contractor, architect, CPA, and potentially a lender and legal advisor. This kind of close collaboration early on helps you avoid missed opportunities later.

One of the biggest advantages of a design-build approach is that important conversations happen earlier. Bringing construction, design, budgeting, and project planning together from day one gives you more time to evaluate decisions — including how those decisions may impact long-term operational and financial goals.

Timing Requirements Could Affect Your Project

To qualify for 100% QPP expensing, projects generally must meet specific construction start and placed-in-service deadlines established by the IRS.

In short:

• Construction must begin after January 19, 2025 and before January 1, 2029.
• Property must be placed into service after July 4, 2025 and before January 1, 2031

Missing these deadlines could make your project ineligible for this tax benefit.

To ensure you meet these deadlines, you will need to start planning your projects early, coordinate schedules carefully, and avoid unnecessary construction delays.

Project scheduling has always been important, but with tax incentives tied to construction timelines, keeping your project moving efficiently is even more valuable. One benefit of APPRO Development’s design-build model is that integrated planning often helps reduce delays between design, permitting, and construction, helping you meet your deadlines.

Building Today With Tomorrow's Growth in Mind

By reducing your tax liability and accelerating depreciation, QPP expensing can lower the upfront cost of investing in a facility that better supports your long-term growth.

After all, the best manufacturing facilities aren't built solely for today's production needs — they're designed to support tomorrow's opportunities as well. Whether that means more production lines, additional warehouse space, or expanded office functions, planning ahead can save you significant time and money down the road.

As you plan your next project, here are a few things to consider:

• Future expansion
• Flexible production space
• Utility capacity
• Warehouse integration
• Employee growth
• Technology upgrades

APPRO Development Helps You Plan Smarter

In summary, 100% QPP expensing could represent one of the biggest tax incentives available to manufacturers investing in new facilities. However, to maximize this benefit, you will need to start planning long before construction is complete.

Combining the expertise of your CPA, lender, legal team, and design-build partner early on in your project can help ensure your facility is designed, built, and documented with both operational success and financial performance in mind.

As an experienced design-build partner, APPRO helps manufacturers with:

• Site selection assistance
• Facility planning
• Land development
• Budget development
• Value engineering
• Design-build construction
• Expansion planning
• Coordinating with owners' professional advisors throughout the project

Whether you're building a new manufacturing plant, expanding an existing facility, or evaluating future growth opportunities, APPRO Development can help guide the planning and construction process from concept to completion.

Ready to start planning a new manufacturing facility or expansion?

The APPRO Development team can help you evaluate your site, design a facility that supports your production goals, and deliver a streamlined design-build process from start to finish. Contact us today to start the conversation.

Disclaimer: This article is for informational purposes only. Neither APPRO Development, Inc., nor CERRON Commercial Properties, LLC, nor any representative of either company or of any third party affiliate, are supplying investment, tax, or other financial advice. As with any financial decision, you should contact your financial, tax, investment, or similar professional for advice and guidance for your specific situation and current needs.