2.305 -Modified Accelerated Cost Recovery System for Equipment

Item	Description	FY2015	FY2016	FY2017	FY2018	FY2019
2.305	Modified Accelerated Cost Recovery System for Equipment For depreciable tangible personal property placed in service after 1980, capital costs may be recovered using the Accelerated Cost Recovery System (ACRS), which applies accelerated methods of depreciation over set recovery periods. For property placed in service after 1987, Massachusetts has adopted the Modified Accelerated Cost Recovery System (MACRS), which consists of General Depreciation System (GDS) and Alternative Depreciation System (GDS). GDS generally uses accelerated depreciation, while ADS uses straight-line depreciation. The accelerated depreciation is double declining balance depreciation over specified periods that are substantially shorter than actual useful lives (200% declining balance for 3-, 5-, 7- and 10-year recovery property and 150% declining balance for 15- and 20-year property). The excess of accelerated depreciation over straight-line depreciation constitutes a tax expenditure, resulting in a deferral of tax or an interest-free loan. For the past decade, the federal government has allowed "bonus depreciation" which further accelerates depreciation for assets placed in service in certain years. However, Massachusetts is decoupled from it. For further discussion, see TIR 03-25 . Origin: IRC, § 168 Estimate: $246.8	220.8	226.9	233.3	239.8	246.8

Key:

ORIGIN
IRC	Federal Internal Revenue Code (26 U.S.C.)
M.G.L.	Massachusetts General Laws
U.S.C	United States Code
ESTIMATES	All estimates are in $ millions.