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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.[citation needed] 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.[citation needed]
By "decoupling" states essentially disallow the new bonus depreciation provision.[citation needed] As of 2010, thirty states plus the District of Columbia that previously followed federal depreciation rules are now "decoupled".[citation needed] See for example, the form 500DM from State of Maryland.