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Tax Incentives for the Hotels Industry

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Reviewed and updated September 2026

Hotel owners and operators may improve cash flow and reduce tax liability through Cost Segregation, Repair vs. Capitalization Reviews, 179D Tax Deductions, Research and Development (R&D) Tax Credits, Transfer Pricing, and other federal, state, and local tax incentives. The opportunities available depend on the property type, acquisition or construction date, renovation and improvement projects, operational activities, and the taxpayer’s specific circumstances.

KBKG is a national tax specialty firm that helps hotel owners and operators identify, document, and support federal, state, and local tax incentives related to Research and Development (R&D) Tax Credit, Repair vs. Capitalization Review, 179D Tax Deduction, Cost Segregation / Fixed Assets, and Transfer Pricing.

KBKG’s tax specialists have experience helping hotel owners and operators evaluate qualifying properties, renovation projects, operational activities, and expenditures to identify available tax incentives. Our team helps businesses document and support eligible tax positions while pursuing applicable federal, state, and local tax benefits

Hotels Industry Tax Saving Opportunities

Research and Development (R&D) Tax Credit

Federal credit worth approximately 7% to 10% of qualified research expenditures related to designing, developing and improving processes, formulae, and software. State R&D tax credits may also be available, allowing eligible companies to maximize their tax benefits.

Cost Segregation for Buildings & Improvements

Building acquisitions, new construction, and major improvements should be reviewed for proper classification of the individual components for tax depreciation.

Repair vs. Capitalization Review §263(a)

Taxpayers often capitalize major building expenditures that could be claimed as current year deductions for repairs and maintenance such as HVAC units, roofs, parking lots and more.

Fixed Asset Review

Evaluating a company's entire fixed asset schedule to identify assets that can be optimized for federal and state tax purposes. Taxpayers utilizing the book method of accounting for tax are not maximizing their available deductions.

179D Incentive for Energy Efficient Buildings

Federal deduction worth up to $5.94/per square foot of energy efficient buildings. Available to architects, engineers, design/build contractors and building owners.

Transfer Pricing

Cross-border transfer prices drive how much income tax a multinational company pays by country. Transfer pricing regulations apply to the intercompany prices of goods, services, royalties, and loans across all industries. Many companies can realize significant tax savings through transfer pricing strategies.

Hotels Industry Tax Insights

5 Reasons to Claim the R&D Tax Credit in 2026

In 2026, the Research & Development (R&D) Tax Credit remains one of the most valuable tools for U.S. companies investing in innovation. Thanks to the One Big Beautiful Bill Act (OBBBA), domestic research expenses are once again fully deductible, restoring a key tax…

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The Top Cost Segregation Providers in 2026 (Ranked & Compared)

Looking for the best cost segregation provider to maximize your income tax savings from commercial or residential real estate investments? In this guide, we compared top cost segregation firms based on a number of critical factors including ASCSP certifications, years in business, public review ratings, national reach with brick-and-mortar offices,

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