S-Corp Taxes - Can expansion / new branch be a capitol expense?

[GreenCompany]

Hello everyone!

I currently own a S-Corp and looking to expand / open new branches in other states. I am seeking advice on taxes.

Company Profile:

Michigan based company - Single location for 40+ years
Product - Design & manufacture industrial pollution control equipment - worldwide market
Annual Sales - 15m

Question: If I open a new branch of the company in a different state (Texas etc) can the expansion cost be considered a capitol or other cost for tax deductions etc.

I'm open to any and all suggestions / recommendations.

Greatly appreciate any advice!

Ps. - this forum is fantastic, thanks again in advance..

[Evan]

Depends on what specific costs you are talking about, but in terms of acquiring new buildings and equipment, all of that would be considered assets to the business (not an expense). Costs of hiring new employees and such are all just regular expenses.

[Freelancier]

You should also talk with an attorney... my first thought when you described what you were doing was that you might want to put that branch under a wholly-owned Texas corporation, so that you can limit your liability and maybe take advantage of any Texas-based tax programs.

[Evan]

He'll definitely want to incorporate as a foreign-based corporation in Texas at a minimum if he's doing business there. He could create a completely separate TX based legal entity too.

Like everything, there are pros and cons and potential tax advantages. These are best determined with the advice of both attorneys and accountants. Seeking the advice of someone in Texas too may be helpful.

[Paul]

If you are expanding to the southwest I can recomend a business attorney there if you need one. His firm happens to work with manufacturing and green energy type businesses. I'm sure he's quite familiar with Texas law.