By: Donald Archer

One of the topics we receive considerable inquiries relates to conveying systems in auto dealerships and other commercial businesses. Conveying systems consist of equipment that move materials or people and include passenger conveying systems, parts lifts, freight elevators, vehicle lifts and material hoists. The function of each conveying system determines its useful, depreciable life.

Passenger conveyor systems such as elevators, escalators, and moving sidewalks are used to transport passengers in horizontal, vertical or inclined directions. These systems and their associated components including handrails and smoke baffles, for example, are designed to remain in place and are considered 39-year real property since they relate to the normal operation of the building.

Parts lifts, belt conveyors, roller conveyors, etc. are used to move supplies or materials, typically to a storage room or mezzanine located on another level. These are similar to elevators except they are usually not equipped to move people and may lack some of the safety equipment found on elevators. Most parts lifts/conveyors are self-supported, requiring no structural modification to the building. Because the primary function of these lifts is moving inventory and other materials used in the business they are typically classified as personal 5-year property.

Freight elevators are designed to carry goods rather than passengers; however, since they are designed to carry passengers as well as materials, they have been associated with elevators and have a useful, depreciable life of 39-years. Freight elevator designs are more durable and less aesthetic and they vary from parts lifts because they travel faster, travel to greater heights, have greater capacities and have automatic operation. Of particular note are the elevators that move automobiles in multi-story dealerships and parking garages. These items have typically been considered to be similar to passenger elevators and assigned a 39-year life despite the fact they serve a unique function related to product handling.

Vehicle lifts and hoists are considered to be tools/equipment in maneuvering automobiles or their components into maintenance positions and are treated as personal property with a 5-year depreciable life. Cranes, overhead hoists and trolley beams will be discussed in a future newsletter because of their unique applications.

Finally, mechanical, electrical and instrumentation utilities supporting the conveying equipment deemed to be personal property should likewise be depreciated as 5-year personal property. Mr. Archer is a Civil Engineer with a Masters degree in Business Administration and a Masters Degree in Engineering Management. He is an Adjunct Professor of Engineering Management at the University of Louisville and is the President of his own engineering company, Lindon Engineering Services, Inc.

CONVEYING SYSTEMS