Retail Stores
Retail buildings are generally 39-year nonresidential real property. The IRS retail matrix covers department and grocery stores: fixtures and strippable floor covering are 5-year there; ceramic tile and parking structures are building. The matrix is examiner guidance from a 2004 field directive.
Educational information, not tax advice.
Updated 2026-10-14
Key takeaways
- Retail buildings are generally 39-year property, straight line, mid-month.
- Publication 5653 Chapter 7.B lists gondolas, showcases, and refrigerator cases as section 1245 class 57.0 property for department and grocery fact patterns.
- For the retail industry, the matrix treats all VCT, sheet vinyl, and carpeting as not permanently attached; permanently affixed ceramic, wood, and epoxy stay with the building.
- Security systems that protect the building are building; electronic article surveillance that protects merchandise is 5-year in that matrix.
- Parking lots are 15-year land improvements; parking structures are 39-year buildings.
- Bonus depreciation as of 2026 can apply to qualified fixtures, site work, and QIP acquired after January 19, 2025, not to the 39-year store shell.
A store is a building under Treas. Reg. section 1.48-1(e)(1). Publication 5653 Chapter 7.B is the retail industries matrix, written as a December 16, 2004 field directive for department or grocery stores. The ATG says the table reflects that industry's general fact pattern, may not apply to other industries, and is not an official pronouncement of law. Boutique, warehouse-club, and showroom facts can differ.
Readily removable awnings and canopies, including bolt-anchored gas-pump canopies not attached to buildings, are section 1245 class 57.0 in that matrix. Concrete footings anchoring gasoline pump canopies are section 1250 class 57.1, 15-year land improvements — the same split Rev. Rul. 2003-54 reaches for typical stand-alone pump canopies. Floor covering in strippable adhesive is treated as 5-year; the matrix says that for the retail industry, all VCT, sheet vinyl, and carpeting are treated as not permanent. Permanently affixed ceramic tile, wood, and epoxy are 39-year building.
Retail fixtures — gondolas, garment racks, showcases, refrigerator and freezer cases, shelving — are 5-year class 57.0. Treas. Reg. section 1.48-1(c) already lists grocery counters, display racks and shelves, refrigerators, and neon and other signs as tangible personal property even when attached to a building. Decorative millwork and cashwraps are personal property in the ATG retail millwork discussion when they serve the retail activity rather than the building.
Parking lots, including striping, curbs, landscape islands, perimeter fences, and sidewalks, are class 00.3, 15-year. Parking structures, garages, and ramps are 39-year buildings. Security systems that protect the building are 39-year; electronic article surveillance (anti-shrink) is 5-year. That exception is about merchandise protection, not about calling every camera 5-year property.
A later interior improvement the taxpayer makes after the store was first placed in service may be qualified improvement property under section 168(e)(6). Qualified retail improvement property was a date-limited predecessor for certain 2009-2017 placements; later work is analyzed as QIP, not under the expired QRIP label. The original building is neither QIP nor QRIP.
This article is educational information, not tax advice. Proposed Super Intelligence retail templates are explanatory only.
Fixtures versus structural components
Treas. Reg. section 1.48-1(e)(2) keeps walls, permanent floor coverings, general lighting, restroom plumbing, and central HVAC with the building. Sole-justification refrigeration that exists only to hold product at a required temperature can be personal property under the regulation's HVAC exception when the facts match; comfort HVAC is building. The matrices say allocation of HVAC is not appropriate.
Do not say every retail floor or every light fixture is 5-year property in every store. Primary sales-floor lighting is building. Display lighting that is not the primary source can be personal property under the ATG lighting test. Permanently set tile is building even in a grocery store.
Site work and canopies
Surface lots and site lighting poles are usually 00.3. Building-mounted exterior lighting is generally building. A pylon sign often splits between a 15-year structure and a 5-year face, as other matrices illustrate; apply the split by function, not by copying a casino row.
Rev. Rul. 2003-54 holds that typical stand-alone gasoline pump canopies are tangible personal property in class 57.0 and that their supporting concrete footings are inherently permanent land improvements in class 57.1. The ruling describes canopies that are not attached to buildings, are bolted to footings, and can be dismantled and reused. A canopy that is part of the store roof is a different fact pattern.
Documentation
Fixture invoices kept out of the general contract, flooring specifications that show adhesive type, refrigeration one-lines, EAS equipment lists, and site plans that distinguish lots from garages are the records Chapter 4 expects. New stores can use actual costs. Acquired stores need estimates reconciled to price less land, without a pro-rata step-up.
Peco Foods is a warning when a written allocation accompanies the purchase of a going retail business. Sampling across identical chain stores is an ATG-listed method; a population under 50 can limit accuracy. A single industry-average percentage is the rule-of-thumb approach examiners are told to view with caution.
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 store is not qualified property. Fixtures, qualifying decor, 15-year site work, and QIP can be. Binding contracts on or before January 19, 2025 stay on the phase-down.
QIP requires an interior improvement made by the taxpayer after the building was first placed in service, and it excludes enlargements, elevators, and internal structural framework. A first-generation build-out that is part of placing the building in service is not QIP. Educational information, not tax advice.
Limits
The matrix is a 2004 grocery and department-store directive reprinted in 2025. Warehouse clubs, showrooms, and temporary pop-ups can differ. Applying it to a shopping-center common area is an analogy discussed on the shopping-center page.
Do not invent a typical retail reclass percentage. AmeriSouth is an apartment case and does not classify store fixtures. Proposed Super Intelligence planogram take-offs are explanatory only.
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.
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- 6IRS Publication 946 — How To Depreciate Property (2025)(opens in a new tab)
Appendix B reproduces the Rev. Proc. 87-56 class lives.