This amendment adds a sunset for the changes to bonus depreciation in House Bill No.

Plain English Breakdown

The official source material does not provide specific details on how property placed into service before January 1, 2031, will be treated after the deadline.

Amendment Adding Sunset Clause for Bonus Depreciation

This amendment adds a sunset clause for changes made in House Bill No. 255 regarding bonus depreciation and requires the Department of Finance to report on its impact by December 2027.

What This Bill Does

• Adds a deadline for when certain tax changes will end, specifically those related to bonus depreciation.
• Requires the Department of Finance to give a report about how these tax changes affected state revenue and federal law updates in December 2027.

Who It Names or Affects

• Businesses that benefit from bonus depreciation under state law.
• The Department of Finance, responsible for preparing the report on tax impacts.

Terms To Know

Bonus Depreciation

A special rule that allows businesses to deduct more of their investment costs from taxes in the first year they buy or build property.

Sunset Clause

A provision in a law that sets an expiration date for certain rules or policies, after which they no longer apply unless renewed.

Limits and Unknowns

• The exact impact of the bonus depreciation changes on state revenue is not known until the Department of Finance reports it.
• Future federal tax laws could change how businesses handle depreciation after January 1, 2031.

Official Summary Text

This amendment adds a sunset for the changes to bonus depreciation in House Bill No. 255, and requires the Department of Finance to present a report regarding the actual revenue impact of this bill, as well as updates on federal law and recommendations for future tax policy at the December 2027 DEFAC meeting.
The decoupling from §§ 70301 and 70307, P.L. 119-21, will sunset after the 2030 tax year. This is when the provisions of P.L. 119-21 for qualified production property are scheduled to expire under federal law. Property placed in service during the decoupling period will continue to be treated under the same schedules for depreciation after the decoupling sunsets. Property placed in service thereafter shall be treated under the then-current federal law.
The research and development changes in House Bill No. 255 apply only to the 2022 through 2025 tax years, so there is no need to sunset them.
This amendment is identical to House Amendment No. 1 except that it adds the requirement that copies of the Department of Finance report to DEFAC must be delivered to the Chief Clerk of the House and the Secretary of the Senate for distribution to all members of the General Assembly.

Current Bill Text

Legislation Document

SPONSOR:

Rep. Harris

HOUSE OF REPRESENTATIVES

153rd GENERAL ASSEMBLY

HOUSE AMENDMENT NO. 3

TO

HOUSE BILL NO. 255

AMEND House Bill No. 255 on line 17 by inserting “

and before January 1, 2031,

” after “

January 19, 2025,

” as it appears therein.

FURTHER AMEND House Bill No. 255 on line 21 by inserting “

placed in service before January 1, 2031

,” after “

P.L.119-21,

” as it appears therein.

FURTHER AMEND House Bill No. 255 on line 29 by inserting

“

and before January 1, 2031,

” after “

December 31, 2025,

” as it appears therein.

FURTHER AMEND House Bill No. 255 on line 34 by inserting “

and before January 1, 2031,

” after “

December 31, 2025,

” as it appears therein.

FURTHER AMEND House Bill No. 255 by inserting the following after line 41:

“Section 5. At the December 2027 meeting of the Delaware Economic and Financial Advisory Council, the Department of Finance shall prepare and present a report regarding the actual impact of the tax changes in this House Bill No. 255 on State revenue. The report must also provide an update regarding any additional changes to federal tax law’s bonus depreciation terms and federal sunset dates. The report should include recommendations and present options regarding the continuance of the bonus depreciation provisions of this Act. Copies of the report must be delivered to the Secretary of the Senate and the Chief Clerk of the House of Representatives for distribution to all members of the General Assembly.”.

SYNOPSIS

This amendment adds a sunset for the changes to bonus depreciation in House Bill No. 255, and requires the Department of Finance to present a report regarding the actual revenue impact of this bill, as well as updates on federal law and recommendations for future tax policy at the December 2027 DEFAC meeting.

The decoupling from §§ 70301 and 70307, P.L. 119-21, will sunset after the 2030 tax year. This is when the provisions of P.L. 119-21 for qualified production property are scheduled to expire under federal law. Property placed in service during the decoupling period will continue to be treated under the same schedules for depreciation after the decoupling sunsets. Property placed in service thereafter shall be treated under the then-current federal law.

The research and development changes in House Bill No. 255 apply only to the 2022 through 2025 tax years, so there is no need to sunset them.

This amendment is identical to House Amendment No. 1 except that it adds the requirement that copies of the Department of Finance report to DEFAC must be delivered to the Chief Clerk of the House and the Secretary of the Senate for distribution to all members of the General Assembly.