Bonus depreciation is a special first-year 100% deduction for eligible property in its first year of use, in addition to any section 179 deduction. Of the 47 states that have no corporate income tax, 8 states and the District of Columbia allow businesses to take bonus depreciation to reduce their state income taxes. Four states – Nevada, South Dakota, Wyoming, and Washington – don’t have corporate income taxes, and the other states don’t allow bonus depreciation.