Automotive Dealerships
Dealership buildings are generally 39-year property. The IRS auto-dealership matrix is specific: showroom display lighting and merchandise-lot lighting can be 5-year; floor-pit structure is building. Bollards are classified by what they protect.
Educational information, not tax advice.
Updated 2026-10-14
Key takeaways
- Publication 5653 Chapter 7.F is the auto-dealership matrix (February 25, 2008 field directive).
- Showroom display lighting that is not the primary lighting is 5-year class 57.0 in that matrix.
- Floor pits and trenches (the structure) are 39-year; lifts, trays, and fluid piping in the pits are 5-year.
- Cabinetry for parts counters and sales is 5-year; cabinetry in restrooms, break rooms, and offices is building.
- Bollards land in three classes depending on whether they protect the building, the site or inventory, or movable equipment.
- Bonus depreciation as of 2026 can apply to qualified display lighting, lifts, and site work acquired after January 19, 2025, not to the 39-year buildings.
A dealership campus usually includes a showroom, offices, parts, and service. The buildings are generally 39-year nonresidential real property. Chapter 7.F is one of the ATG’s industry tables and, like the others, is examiner guidance for a general fact pattern, not a statute. Treas. Reg. §1.48-1(c) already lists a hydraulic car lift as property in the nature of machinery and therefore tangible personal property even when annexed to the ground.
Floor pits and trenches — the structure — are 39-year property in that matrix. Lifts, trays, and piping for fluids in the pits are 5-year class 57.0. Showroom display lighting that highlights automobiles and is not the primary lighting is 5-year. Exterior lighting that highlights merchandise and display parking is 5-year. Primary showroom and shop lighting remain building fixtures under Treas. Reg. §1.48-1(e)(2).
Cabinetry for retail activity — parts counters and sales-area cabinets — is 5-year. Cabinetry in restrooms, break areas, and offices is 39-year. That purpose test is the matrix’s way of applying the accessory-to-the-business idea from case law; the phrase “accessory to the operation of a business” does not appear in Treas. Reg. §1.48-1 itself.
Landscaping that would not be replaced with a depreciable asset is land. Landscaping that would be destroyed with a related depreciable asset is class 00.3, 15-year. Display lots and customer parking are typically 00.3. A parking structure is a 39-year building. Do not treat the entire paved site as 5-year property because cars are displayed on it.
Bollards protecting the building are 39-year. Bollards protecting site items or inventory are 15-year. Movable bollards protecting equipment inside are 5-year. The same product can land in three classes. The matrix’s bollard rows are the clearest ATG illustration that function, not catalog number, controls.
This page is educational information, not tax advice. Proposed Super Intelligence dealership templates are explanatory only.
Showroom, service, and parts
Display lighting and merchandise-lot lighting are the distinctive 5-year lighting rows. They apply when other sources would provide sufficient general light if the display lights were turned off. A high-bay shop fixture that is the only light in the bay is building.
Parts racks and showroom furniture are personal-property candidates under class 57.0 or, for office desks, class 00.11. Restroom accessories stay with the building. Do not say every cabinet in a dealership is 5-year property in every store. Treas. Reg. section 1.48-1(e)(2) still lists plumbing fixtures, general wiring, and central HVAC as structural components of the showroom and service building.
Bollards, landscaping, and lots
Photograph what each bollard line protects. A ring around the showroom glass is a building-protection fact. A ring around a row of vehicles is an inventory fact. A movable post next to a lift is an equipment fact.
The landscaping replacement test needs a site visit. Sod that would be torn out when a display lot is rebuilt can be 00.3. A perimeter berm that would remain when the lot is resurfaced can be land.
Documentation
Lighting schedules that separate display from general fixtures, pit and lift shop drawings, cabinetry floor plans labeled by room use, and a bollard map are the records that make Chapter 7.F usable. New stores can use actual costs. Acquired stores need land first.
Peco Foods can bind a written allocation of a going dealership business. Sampling across identical franchise stores is an ATG method; a single “industry average” percentage is not.
Bonus depreciation and QIP as of 2026
Qualified property acquired after January 19, 2025 is eligible for 100% bonus depreciation under Notice 2026-11. The 39-year buildings are not qualified property. Display lighting, lifts, qualifying cabinetry, and 15-year lots can be. Binding contracts on or before January 19, 2025 stay on the phase-down.
Later interior improvements of the showroom or offices may be QIP if they meet §168(e)(6). Service-bay enlargements are excluded as enlargements. Educational information, not tax advice.
Limits
The matrix is a dealership directive. Applying it to a stand-alone body shop or a quick-lube is analogy, discussed on the auto-repair page. Do not invent a typical dealership reclass percentage.
AmeriSouth does not classify showroom millwork. Decorative millwork can be personal property in the restaurant matrix and structural in an apartment case; a dealership reception desk needs its own facts.
Sources
- 1IRS Publication 5653 — Cost Segregation Audit Techniques Guide (rev. 2-2025)(opens in a new tab)
Written for IRS examiners. The guide states it is not an official pronouncement of law and cannot be cited as authority. It predates the July 2025 law.
- 2
- 3
- 4
- 5IRS Publication 946 — How To Depreciate Property (2025)(opens in a new tab)
Appendix B reproduces the Rev. Proc. 87-56 class lives.