Decoupling modification: Difference between revisions

Revision as of 14:54, 23 April 2010

Revision as of 05:50, 2 August 2010

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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" statestates essentialllyessentially 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]].