Decoupling modification is a [[tax]] terminology resulting from the [[federal tax law]] enacted March 9, 2002, which created a new tax deduction for "bonus depreciation" that threatens to cost states very large amounts of revenue. Prior to such law, nearly all states used the federal definition of taxable business income including the federal allowance for depreciation as the basis for their own tax calculations.
By "decoupling" state essentiallly disallow the new bonus depreciation provision. As of 2010, thirty states plus the [[District of Columbia]] that previously followed federal [[depreciation]] rules are now "decoupled". See for example, the form 500DM from State of [[Maryland]].
