Auto Manufacturing

The IRS published a comprehensive audit techniques guide used by examiners who evaluate cost segregation studies submitted by taxpayers. This guide helps taxpayers and study providers understand how to prepare audit-defensible studies.

Last updated by the IRS: February 2025.

G. Auto Manufacturing Industry

(1) This matrix will provide assistance to agents in the classification and examination of a taxpayer who is recovering costs through depreciation of tangible property used in the Auto Dealership Industry.

(2) Asset Classification for Cost Segregation in the Motor Vehicle Manufacturing Industry - Exhibit A - CSI MasterFormat Division

Exhibit A

Asset19952004Property TypeAuto Manufacturing DescriptionAsset Class/Recovery
Abrasive Blast Equipment1515§ 1245Equipment and apparatus, for abrasive blasting including all associated apparatus and dust collectors.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Assembly Equipment/Machinery1515§ 1245All machinery and equipment used in vehicle assembly operations, including presses, welders, transfer equipment, conveyors, robots, automated assembly systems, fastening equipment, and all related associated components and support structures.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Boiler Plant Equipment1515§ 1245All steam generation and distribution equipment specifically designed and used for process operations or essential to the production process of motor vehicles. Does not include boilers designed for comfort heating in the building. See also Steam & Hot Water Systems.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Branding/Lettering Equipment1515§ 1245Equipment for applying paint, stripes, pin striping, emblems, vinyl, and logos to vehicles or parts. Includes spray booths and equipment directly related to branding.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Casting Equipment1515§ 1245Foundry equipment and apparatus used in the casting process, including furnaces, molds, patterns, and related casting equipment.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Cooling Systems1515§ 1245Special cooling systems designed and used for process operations and essential to the production process of motor vehicles. Does not include comfort cooling (HVAC). See also Steam & Hot Water Systems.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Conveyors1515§ 1245All conveyor systems used in the manufacturing process, whether gravity, powered, chain-driven, or other, used for moving parts, assemblies, work-in-process, or finished vehicles. Includes all associated components, rails, and supports.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Cooling Tower Equipment1515§ 1245Cooling towers and associated equipment used for process water cooling essential to motor vehicle manufacturing. Not comfort cooling.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Data/Control Systems & Computers0505§ 1245Computer systems, PLCs, sensors, controllers, and related apparatus used to control and monitor manufacturing processes. Not general office computing equipment.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Dyno/Test Equipment1515§ 1245Dynamometers and test equipment for testing finished vehicles or components for performance, durability, and quality.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Electrical – Building1515§ 1250All components of the building electrical system used in the operation or maintenance of the building or to provide general building services such as electrical outlets of general applicability and accessibility, lighting, heating, ventilation, air conditioning, and electrical wiring used in the building.Nonresidential Real Property – 39 Years
Electrical – General Apparatus/Equipment ≤500 KVA1515§ 1245Electrical apparatus, components, and equipment exclusively used in motor vehicle manufacturing operations; electrical wiring, conduit, and connections serving dedicated process machinery and equipment. NEC Nameplate Rating of ≤500 KVA.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Electrical – General Apparatus/Equipment >500 KVA1515§ 1245Industrial electrical generating, distribution, and related apparatus in excess of 500 KVA NEC Nameplate Rating. Transformers, switchgear, switchboards, distribution panels, substations, and related equipment.Asset Class 00.4 Miscellaneous Manufacturing Property – 15 Years
Emergency Systems & Backup Power1515§ 1245Generator sets, backup power supplies, uninterruptible power supplies (UPS), automatic transfer switches, and related emergency power systems for manufacturing operations.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Environmental/Emission Control Equipment1515§ 1245Pollution control equipment, emission control systems, air quality monitoring systems, effluent treatment systems, and wastewater treatment equipment.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Exhaust/Fume Hood Systems1515§ 1245Ventilation and fume removal systems designed and used specifically for manufacturing process emissions (paint, welding, solvents, etc.). Not comfort ventilation.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Fire Protection & Safety1515§ 1250Building fire protection systems, alarms, sprinklers, emergency exits, and safety systems for the building structure.Nonresidential Real Property – 39 Years
Flooring – Building1515§ 1250Building floors, floor systems, and permanent floor coverings integral to the building structure.Nonresidential Real Property – 39 Years
Flooring – Process Specific1515§ 1245Special floors specifically designed for manufacturing processes, such as epoxy floors designed for chemical resistance, floors for robotics or conveyor systems, and specialized manufacturing area flooring.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Forging Equipment1515§ 1245Forging presses, heating equipment, and related forging machinery.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Fuel Systems1515§ 1245Fuel supply systems, tanks, pumps, meters, and distribution systems for manufacturing equipment.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Furniture & Fixtures – Building0404§ 1245Office furniture and fixtures used in administrative and office areas of the manufacturing plant.Asset Class 00.11 Office Furniture, Fixtures, and Equipment – 7 Years
Grinding Equipment1515§ 1245Grinding machines, mills, and related grinding apparatus for finishing vehicle components.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Heating & Cooling – Building1515§ 1250Building comfort heating and air conditioning systems.Nonresidential Real Property – 39 Years
Heating & Cooling – Process1515§ 1245Special heating, cooling, or temperature control systems designed and used exclusively for the manufacturing process and essential to vehicle production.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Hoist/Lift Equipment1515§ 1245Hoists, lifts, jacks, and elevators used in manufacturing operations.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Hydraulic/Pneumatic Systems1515§ 1245Hydraulic and pneumatic power systems, pumps, compressors, cylinders, valves, hoses, and related components used in manufacturing operations.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Inspection Equipment/Gauges1515§ 1245Quality control and inspection equipment including measuring devices, automated inspection systems, testers, and gauges (nonspecialized).Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Jigs, Dies, Fixtures & Molds (Specialized)0303§ 1245Specialized tooling: jigs, dies, fixtures, fixtures, molds, patterns, and gauges specifically designed for the manufacturing of motor vehicles. Used only in the production of a specific vehicle model or variant and have limited life expectancy or use beyond specific production runs.Asset Class 37.12 Special Tools – Motor Vehicles – 3 Years
Lathing/Boring Equipment1515§ 1245Lathes, boring machines, turning equipment, and related machinery used in finishing vehicle components.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Lighting – Building1515§ 1250Building general lighting systems for facility illumination.Nonresidential Real Property – 39 Years
Lighting – Process/Equipment1515§ 1245Specialized lighting directly associated with manufacturing equipment or process inspection areas.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Loading Equipment1515§ 1245Equipment for loading, unloading, and handling vehicles and parts, including loading racks, platforms, and related equipment.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Machine Tools1515§ 1245General machine tools and metalworking equipment not specifically classified elsewhere.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Machinery & Equipment – General1515§ 1245Machinery and equipment directly related to vehicle manufacturing not specifically classified elsewhere.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Material Handling Equipment1515§ 1245Forklifts, pallet jacks, material handling systems, robots, automated guided vehicles (AGVs), and related material handling apparatus.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Modular Fixturing/Workstations1515§ 1245Modular worktables, fixtures, workstations, and other equipment designed for flexible manufacturing operations.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Office Equipment – Computing0505§ 1245General computing equipment (not process-control related), printers, scanners, and peripherals used in administrative functions.Asset Class 00.12 Information Systems – 5 Years
Office Equipment – Non-Computing0707§ 1245Copiers, fax machines, water coolers, and other general office equipment.Asset Class 57.0 Distributive Trades and Services – 5 Years
Paint Systems/Equipment1515§ 1245Paint application systems, spray booths, paint storage and circulation systems, paint lines, and related paint equipment.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Parts Cleaning/Washing Equipment1515§ 1245Parts washers, cleaning systems, and related equipment for cleaning vehicle components.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Plumbing – Building1515§ 1250General building plumbing systems.Nonresidential Real Property – 39 Years
Plumbing – Process1515§ 1245Process water systems, coolant systems, and special plumbing connections serving dedicated manufacturing equipment.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Press & Stamping Equipment1515§ 1245Presses for stamping, forming, and shaping vehicle components and assemblies.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Process Vessels & Tanks1515§ 1245Process tanks, chemical tanks, storage vessels, and related containment equipment used in manufacturing operations.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Pumps, Compressors & Motors1515§ 1245Pumps, compressors, motors, and related power equipment serving manufacturing operations.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Quality Control Systems1515§ 1245Automated quality control systems, vision systems, statistical process control (SPC) software and hardware, and related quality assurance equipment.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Robots & Automated Systems1515§ 1245Manufacturing robots, robotic welders, automated material handling systems, automated assembly systems, and related automation equipment.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Safety Equipment1515§ 1245Employee safety equipment, guards, protective barriers, and other safety devices integrated into manufacturing equipment or processes.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Scaffolding (Permanent)1515§ 1245Permanent work platforms, walkways, and access structures integral to manufacturing equipment operations.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Sound & Lighting Control1515§ 1245Process-specific sound and vibration monitoring systems; specialized lighting controls.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Spot Welders1515§ 1245Resistance welders, spot welders, and related welding equipment used in vehicle assembly.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Storage Systems & Racks1515§ 1245Parts storage systems, shelving, and automated storage and retrieval systems (ASRS) used in manufacturing operations.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Stress Testing Equipment1515§ 1245Equipment for testing component and vehicle durability and structural integrity.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Structural Components – Process Equipment1515§ 1245Structural frames, supports, and mounting apparatus that are integral and essential components of manufacturing machinery and equipment.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Structural Components – Building1515§ 1250Building structure, columns, beams, roofs, walls, and other building components.Nonresidential Real Property – 39 Years
Suspended Systems/Structures1515§ 1245Conveyor bridges, overhead cranes, monorails, suspended work platforms, and related suspended systems serving manufacturing operations.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Transmission Equipment1515§ 1245Transmission belts, gearboxes, couplings, and power transmission equipment used in manufacturing machinery.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Trim Equipment1515§ 1245Equipment used for trimming, cutting, and finish work on vehicles and components.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Utility Distribution Systems1515§ 1245Process utility distribution systems (air, water, steam, gas, coolants) serving manufacturing operations.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Valves, Fittings & Connections1515§ 1245Valves, fittings, piping connections, and related components serving process systems and dedicated equipment.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Ventilation – Building1515§ 1250General building ventilation and air distribution systems for comfort and building maintenance.Nonresidential Real Property – 39 Years
Ventilation – Process1515§ 1245Specialized ventilation and fume extraction systems exclusively serving the manufacturing process.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Washers/Dryers – Process1515§ 1245Industrial washers, dryers, and drying equipment used in parts cleaning and processing operations.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Welding Equipment1515§ 1245Arc welders, resistance welders, gas welders, and related welding apparatus.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Windows – Building1515§ 1250Windows and glass partitions of the building.Nonresidential Real Property – 39 Years
Wiring & Conduit – Process1515§ 1245Electrical wiring, conduit, and connections exclusively serving dedicated manufacturing equipment and processes.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years
Work Cell Equipment1515§ 1245Integrated work cells, assembly cells, and modular production systems used in vehicle manufacturing.Asset Class 37.11 Manufacture of Motor Vehicles – 7 Years

(3) See Chapter 8.A.4. of the Cost Segregation Audit Techniques Guide for Functional Allocation

Original document: Cost Segregation Audit Technique Guide (IRS Publication 5653)

Contents

Cost Segregation Study 2
Methodology 5
Detailed Asset Schedule 11
Reference Documentation 123
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