Author | Hiromine (Jerry) Fujita
In today’s competitive landscape, manufacturers and distributors face constant pressure to innovate, reduce costs, and prepare for market fluctuations. Yet one powerful lever is often underutilized: strategic tax planning.
At CDH, we see tax planning not merely as compliance, but as a core driver of business growth and resilience. Here’s how strategic tax planning can future-proof your manufacturing business:
- Maximizing Tax Credits and Incentives
Many manufacturers miss out on valuable federal and state incentives such as the R&D Tax Credit, which applies not only to groundbreaking research but also to process improvements on the shop floor. Additionally, Section 179 and bonus depreciation can provide immediate deductions for equipment investments, improving cash flow and enabling further reinvestment.
- Optimizing Entity Structure
As your business evolves, your entity structure should too. Revisiting your corporate structure—whether operating as a C-corp, S-corp, or partnership—can reduce effective tax rates, ease succession planning, and enhance shareholder value.
- Leveraging Cost Segregation Studies
Cost segregation accelerates depreciation deductions on facility investments by reclassifying building components. This strategy can significantly lower tax liability in the years following a plant expansion or renovation, freeing capital for strategic initiatives.
- Managing Multistate Tax Exposure
Manufacturers with distribution networks across multiple states face complex sales tax and income tax obligations. A proactive multistate tax strategy mitigates risk, ensures compliance, and identifies opportunities to reduce your tax footprint.
- Preparing for Global Supply Chain Shifts
With geopolitical changes affecting tariffs and sourcing decisions, tax-efficient supply chain planning is essential. Structuring operations to minimize customs duties and optimize transfer pricing aligns tax outcomes with business strategy.
Driving Sustainable Growth
Strategic tax planning is more than an annual filing exercise. It is a forward-looking approach that ensures your manufacturing or distribution business remains competitive, resilient, and positioned for sustainable growth.
At CDH, our dedicated manufacturing and distribution team partners with leaders like you to integrate tax strategy into your overall business goals—turning potential tax savings into reinvestment opportunities that propel your company forward.
Let CDH help you future-proof your business.
Contact our Manufacturing and Distribution Tax Advisors to discuss how strategic tax planning can unlock growth opportunities for your company today. You can contact us today to set up your free consultation at [email protected].