| Organization: A manufacturer in need of a bigger facility. | Need: Money to pay for more manufacturing space without taking on debt. | Outcome: A four-year tax plan, producing $1.2 million in cash flow to help pay for construction. |
Understanding the situation
A growing manufacturing company was running out of space. After several years of strong performance, the business had fully maxed out its existing facility.
To support continued growth, the company needed to either expand or construct a new building — an investment estimated between $5 million and $10 million.
While the business was profitable, ownership wanted to avoid taking on debt and preferred using existing cash flow more strategically to fund the expansion.
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Exploring the challenge
The manufacturer reached out to CLA to get ideas about increasing cash flow. CLA designed a four‑year tax strategy to help turn tax liabilities into a funding source for the factory expansion. CLA used a combination of tax strategies available to manufacturers through the One Big Beautiful Bill Act.
Strategies included:
- Fully deducting the company’s R&D expenses — The business had accumulated significant R&D costs over prior years, many of which hadn’t been fully used.
- Taking immediate advantage of those deductions — Income was accelerated into the earliest year of the tax plan, allowing the company to generate cash flow and use available R&D expenses to fully absorb the income tax burden
Next, CLA aligned the construction strategy with tax planning:
- The planned expansion was structured in two phases, coordinated with the general contractor so separate certificates of occupancy could be issued in different years
- This allowed the company to deduct major portions of the construction costs across multiple tax years instead of all at once
“CLA helped us unlock R&D credits and time our income and deductions, creating $1.2 million in cash flow, helping to fund our expansion without taking on new debt.” — CFO, manufacturing company
Achieving results
By combining R&D planning, income timing, and phased construction deductions, the manufacturer significantly reduced its tax burden over a four‑year period. The result was approximately $300,000 in tax savings per year, totaling more than $1.2 million — cash redirected toward the facility expansion rather than paid in taxes.
The company was also able to benefit from R&D tax credits, which added roughly $150,000 per year in additional value.
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