For nearly 100 years, states have based their taxes on federal
taxes, most notably those addressing estate tax and depreciation.
But when the federal government decides to reduce—or
eradicate—certain taxes, states face significant losses in
revenue. To recoup their losses, some states vote to "decouple"
themselves from certain federal taxes and write their own tax
Of course, that just makes filing taxes more complicated for
After President Bush's bill to repeal the estate tax passed
Congress, 18 states passed legislation to decouple their estate tax
laws from the federal tax law. (The 18 states are highlighted in
the map.) In addition, the federal government's push to change how
businesses depreciate equipment, for example, is not widely
accepted by state tax bodies. (The biggest hurdle for states to
overcome is what is known as "bonus" depreciation, which allows
businesses to write off up to 50 percent of an asset during the
first year rather than depreciating the full amount during the
useful life of the asset.)
The 18 states that have "decoupled" from the
federal estate tax...
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