Cost Segregation by State
Each state has unique tax rules that affect your cost segregation ROI. Some fully conform to federal bonus depreciation, others don't. State income tax rates vary from 0% to 13.3%. Matthew Gigantelli, ASCSP (M009-25), breaks down the numbers for each state.
Alabama
First-Year Savings
$22,000 - $58,000
ROI
7:1 to 11:1
State Income Tax
2% - 5%
Reclassification
25-34%
Top Markets
Huntsville · Birmingham · Mobile · Montgomery
Alaska
First-Year Savings
$30,000 - $78,000
ROI
6:1 to 10:1
State Income Tax
0%
Reclassification
24-32%
Top Markets
Anchorage · Fairbanks · Juneau · Wasilla
Arizona
First-Year Savings
$40,000 - $105,000
ROI
9:1 to 15:1
State Income Tax
2.5% flat
Reclassification
28-37%
Top Markets
Phoenix · Scottsdale · Tucson · Mesa
Arkansas
First-Year Savings
$25,000 - $65,000
ROI
7:1 to 12:1
State Income Tax
4.4% top rate
Reclassification
25-34%
Top Markets
Little Rock · Fayetteville · Fort Smith · Bentonville
California
First-Year Savings
$65,000 - $180,000
ROI
7:1 to 18:1
State Income Tax
1% - 13.3%
Reclassification
26-36%
Top Markets
Los Angeles · San Francisco Bay Area · San Diego · Sacramento
Colorado
First-Year Savings
$48,000 - $130,000
ROI
9:1 to 16:1
State Income Tax
4.4% flat
Reclassification
27-36%
Top Markets
Denver · Colorado Springs · Boulder · Fort Collins
Connecticut
First-Year Savings
$52,000 - $140,000
ROI
8:1 to 16:1
State Income Tax
2% - 6.99%
Reclassification
26-35%
Top Markets
Stamford · Hartford · New Haven · Bridgeport
Delaware
First-Year Savings
$35,000 - $90,000
ROI
8:1 to 13:1
State Income Tax
2.2% - 6.6%
Reclassification
26-34%
Top Markets
Wilmington · Dover · Newark · Rehoboth Beach
District of Columbia
First-Year Savings
$95,000 - $280,000
ROI
8:1 to 23:1
State Income Tax
4% - 10.75%
Reclassification
25-34%
Top Markets
Downtown DC · Capitol Hill · Georgetown · Navy Yard
Florida
First-Year Savings
$52,000 - $140,000
ROI
10:1 to 18:1
State Income Tax
0%
Reclassification
30-40%
Top Markets
Miami · Orlando · Tampa Bay · Jacksonville
Georgia
First-Year Savings
$42,000 - $110,000
ROI
9:1 to 15:1
State Income Tax
5.19% flat
Reclassification
28-38%
Top Markets
Atlanta · Savannah · Augusta · Columbus
Hawaii
First-Year Savings
$72,000 - $200,000
ROI
8:1 to 20:1
State Income Tax
1.4% - 11%
Reclassification
28-38%
Top Markets
Honolulu · Maui · Kona · Kauai
Idaho
First-Year Savings
$40,000 - $105,000
ROI
9:1 to 15:1
State Income Tax
5.3% flat
Reclassification
27-36%
Top Markets
Boise · Meridian · Nampa · Coeur d'Alene
Illinois
First-Year Savings
$45,000 - $130,000
ROI
8:1 to 15:1
State Income Tax
4.95% flat
Reclassification
26-36%
Top Markets
Chicago · Naperville · Aurora · Rockford
Indiana
First-Year Savings
$30,000 - $75,000
ROI
8:1 to 13:1
State Income Tax
2.95% flat
Reclassification
26-35%
Top Markets
Indianapolis · Fort Wayne · South Bend · Evansville
Iowa
First-Year Savings
$24,000 - $62,000
ROI
7:1 to 11:1
State Income Tax
3.8% flat
Reclassification
25-34%
Top Markets
Des Moines · Cedar Rapids · Iowa City · Davenport
Kansas
First-Year Savings
$24,000 - $62,000
ROI
7:1 to 11:1
State Income Tax
5.2% - 5.58%
Reclassification
25-34%
Top Markets
Wichita · Kansas City (KS) · Overland Park · Topeka
Kentucky
First-Year Savings
$25,000 - $65,000
ROI
7:1 to 12:1
State Income Tax
3.5% flat
Reclassification
26-35%
Top Markets
Louisville · Lexington · Bowling Green · Covington
Louisiana
First-Year Savings
$24,000 - $65,000
ROI
7:1 to 12:1
State Income Tax
3% flat
Reclassification
28-38%
Top Markets
New Orleans · Baton Rouge · Shreveport · Lafayette
Maine
First-Year Savings
$35,000 - $90,000
ROI
8:1 to 13:1
State Income Tax
5.8% - 7.15%
Reclassification
26-35%
Top Markets
Portland · Bangor · Lewiston · Bar Harbor
Maryland
First-Year Savings
$50,000 - $140,000
ROI
8:1 to 16:1
State Income Tax
2% - 6.5% (+ county taxes up to ~3.2%)
Reclassification
26-35%
Top Markets
Baltimore · Bethesda · Silver Spring · Columbia
Massachusetts
First-Year Savings
$65,000 - $185,000
ROI
8:1 to 19:1
State Income Tax
5% (9% on income >$1M)
Reclassification
26-35%
Top Markets
Boston · Cambridge · Worcester · Springfield
Michigan
First-Year Savings
$32,000 - $82,000
ROI
8:1 to 14:1
State Income Tax
4.25% flat
Reclassification
27-36%
Top Markets
Detroit · Grand Rapids · Ann Arbor · Lansing
Minnesota
First-Year Savings
$42,000 - $115,000
ROI
8:1 to 14:1
State Income Tax
5.35% - 9.85%
Reclassification
26-35%
Top Markets
Minneapolis · St. Paul · Bloomington · Rochester
Mississippi
First-Year Savings
$18,000 - $46,000
ROI
6:1 to 10:1
State Income Tax
4% flat
Reclassification
25-34%
Top Markets
Jackson · Gulfport-Biloxi · Hattiesburg · Oxford
Missouri
First-Year Savings
$30,000 - $78,000
ROI
8:1 to 13:1
State Income Tax
2% - 4.7%
Reclassification
26-35%
Top Markets
Kansas City · St. Louis · Springfield · Columbia
Montana
First-Year Savings
$42,000 - $110,000
ROI
9:1 to 15:1
State Income Tax
4.7% - 5.65%
Reclassification
27-36%
Top Markets
Bozeman · Billings · Missoula · Kalispell
Nebraska
First-Year Savings
$26,000 - $66,000
ROI
7:1 to 12:1
State Income Tax
2.46% - 4.55%
Reclassification
25-34%
Top Markets
Omaha · Lincoln · Grand Island · Bellevue
Nevada
First-Year Savings
$55,000 - $160,000
ROI
10:1 to 19:1
State Income Tax
0%
Reclassification
32-42%
Top Markets
Las Vegas · Reno · Henderson · North Las Vegas
New Hampshire
First-Year Savings
$42,000 - $110,000
ROI
9:1 to 15:1
State Income Tax
0%
Reclassification
26-35%
Top Markets
Manchester · Nashua · Concord · Portsmouth
New Jersey
First-Year Savings
$55,000 - $155,000
ROI
8:1 to 17:1
State Income Tax
1.4% - 10.75%
Reclassification
26-35%
Top Markets
Newark/Jersey City · Princeton · Cherry Hill · Atlantic City
New Mexico
First-Year Savings
$30,000 - $80,000
ROI
8:1 to 13:1
State Income Tax
1.5% - 5.9%
Reclassification
26-35%
Top Markets
Albuquerque · Santa Fe · Las Cruces · Rio Rancho
New York
First-Year Savings
$85,000 - $250,000
ROI
8:1 to 20:1
State Income Tax
4% - 10.9%
Reclassification
25-35%
Top Markets
New York City · Long Island · Westchester · Buffalo
North Carolina
First-Year Savings
$38,000 - $95,000
ROI
8:1 to 14:1
State Income Tax
3.99% flat
Reclassification
27-36%
Top Markets
Charlotte · Raleigh-Durham · Greensboro · Wilmington
North Dakota
First-Year Savings
$20,000 - $52,000
ROI
6:1 to 10:1
State Income Tax
1.95% - 2.5%
Reclassification
24-33%
Top Markets
Fargo · Bismarck · Grand Forks · Minot
Ohio
First-Year Savings
$28,000 - $72,000
ROI
7:1 to 12:1
State Income Tax
0% - 3.5%
Reclassification
26-35%
Top Markets
Columbus · Cleveland · Cincinnati · Dayton
Oklahoma
First-Year Savings
$22,000 - $58,000
ROI
7:1 to 11:1
State Income Tax
2.5% - 4.5%
Reclassification
25-34%
Top Markets
Oklahoma City · Tulsa · Norman · Broken Arrow
Oregon
First-Year Savings
$48,000 - $135,000
ROI
9:1 to 17:1
State Income Tax
4.75% - 9.9%
Reclassification
27-36%
Top Markets
Portland · Bend · Eugene · Salem
Pennsylvania
First-Year Savings
$40,000 - $110,000
ROI
8:1 to 14:1
State Income Tax
3.07% flat
Reclassification
26-35%
Top Markets
Philadelphia · Pittsburgh · Allentown · Harrisburg
Rhode Island
First-Year Savings
$38,000 - $100,000
ROI
8:1 to 14:1
State Income Tax
3.75% - 5.99%
Reclassification
26-35%
Top Markets
Providence · Warwick · Newport · Cranston
South Carolina
First-Year Savings
$35,000 - $90,000
ROI
9:1 to 14:1
State Income Tax
0% - 6.4%
Reclassification
28-37%
Top Markets
Charleston · Myrtle Beach · Greenville · Columbia
South Dakota
First-Year Savings
$26,000 - $66,000
ROI
7:1 to 12:1
State Income Tax
0%
Reclassification
25-34%
Top Markets
Sioux Falls · Rapid City · Aberdeen · Brookings
Tennessee
First-Year Savings
$43,000 - $115,000
ROI
10:1 to 16:1
State Income Tax
0%
Reclassification
29-38%
Top Markets
Nashville · Memphis · Knoxville · Chattanooga
Texas
First-Year Savings
$47,000 - $125,000
ROI
8:1 to 15:1
State Income Tax
0%
Reclassification
28-38%
Top Markets
Houston · Dallas-Fort Worth · Austin · San Antonio
Utah
First-Year Savings
$48,000 - $130,000
ROI
9:1 to 16:1
State Income Tax
4.5% flat
Reclassification
27-36%
Top Markets
Salt Lake City · Provo · Ogden · Park City
Vermont
First-Year Savings
$32,000 - $85,000
ROI
8:1 to 12:1
State Income Tax
3.35% - 8.75%
Reclassification
26-35%
Top Markets
Burlington · Stowe · Killington · Montpelier
Virginia
First-Year Savings
$50,000 - $140,000
ROI
9:1 to 16:1
State Income Tax
2% - 5.75%
Reclassification
27-36%
Top Markets
Northern Virginia · Richmond · Virginia Beach · Charlottesville
Washington
First-Year Savings
$58,000 - $160,000
ROI
9:1 to 18:1
State Income Tax
0% (7% capital gains tax on gains >$270K)
Reclassification
27-36%
Top Markets
Seattle · Bellevue · Tacoma · Spokane
West Virginia
First-Year Savings
$15,000 - $40,000
ROI
6:1 to 9:1
State Income Tax
2.22% - 4.82%
Reclassification
24-33%
Top Markets
Charleston · Morgantown · Huntington · Wheeling
Wisconsin
First-Year Savings
$35,000 - $90,000
ROI
8:1 to 13:1
State Income Tax
3.5% - 7.65%
Reclassification
26-35%
Top Markets
Milwaukee · Madison · Green Bay · Kenosha
Wyoming
First-Year Savings
$35,000 - $90,000
ROI
8:1 to 13:1
State Income Tax
0%
Reclassification
26-35%
Top Markets
Jackson Hole · Cheyenne · Casper · Laramie
Understanding State Conformity with Bonus Depreciation
One of the most important factors in cost segregation planning is whether your state conforms to federal bonus depreciation rules. With 100% bonus depreciation permanently restored under the One Big Beautiful Bill Act (July 2025), this distinction matters more than ever.
- Full Conformity states (like Texas, Florida, Georgia) provide both federal and state benefits from cost segregation. Reclassified components get the full 100% bonus depreciation at both levels.
- Partial Conformity states (like New York) require you to add back bonus depreciation for state purposes, then allow a subtraction over the asset's useful life. This creates a timing difference, not a permanent one.
- Non-Conforming states (like California, North Carolina, Pennsylvania) do not recognize federal bonus depreciation at the state level. You still get the full federal benefit, but state depreciation follows standard MACRS schedules.
Regardless of conformity status, cost segregation is almost always worth pursuing. Even in non-conforming states, the federal benefit alone typically delivers 7:1 to 18:1 ROI.
Find Your State's Cost Segregation Potential
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