diff --git a/application/src/main/java/org/thingsboard/server/service/state/DefaultDeviceStateService.java b/application/src/main/java/org/thingsboard/server/service/state/DefaultDeviceStateService.java
index 23276dc104..1f9239cea3 100644
--- a/application/src/main/java/org/thingsboard/server/service/state/DefaultDeviceStateService.java
+++ b/application/src/main/java/org/thingsboard/server/service/state/DefaultDeviceStateService.java
@@ -223,7 +223,7 @@ public class DefaultDeviceStateService extends AbstractPartitionBasedService<Dev
         }
         log.trace("on Device Connect [{}]", deviceId.getId());
         DeviceStateData stateData = getOrFetchDeviceStateData(deviceId);
-        long ts = System.currentTimeMillis();
+        long ts = getCurrentTimeMillis();
         stateData.getState().setLastConnectTime(ts);
         save(deviceId, LAST_CONNECT_TIME, ts);
         pushRuleEngineMessage(stateData, TbMsgType.CONNECT_EVENT);
@@ -264,7 +264,7 @@ public class DefaultDeviceStateService extends AbstractPartitionBasedService<Dev
             return;
         }
         DeviceStateData stateData = getOrFetchDeviceStateData(deviceId);
-        long ts = System.currentTimeMillis();
+        long ts = getCurrentTimeMillis();
         stateData.getState().setLastDisconnectTime(ts);
         save(deviceId, LAST_DISCONNECT_TIME, ts);
         pushRuleEngineMessage(stateData, TbMsgType.DISCONNECT_EVENT);
@@ -398,10 +398,10 @@ public class DefaultDeviceStateService extends AbstractPartitionBasedService<Dev
     void checkAndUpdateState(@Nonnull DeviceId deviceId, @Nonnull DeviceStateData state) {
         var deviceState = state.getState();
         if (deviceState.isActive()) {
-            updateInactivityStateIfExpired(System.currentTimeMillis(), deviceId, state);
+            updateInactivityStateIfExpired(getCurrentTimeMillis(), deviceId, state);
         } else {
             //trying to fix activity state
-            if (isActive(System.currentTimeMillis(), deviceState)) {
+            if (isActive(getCurrentTimeMillis(), deviceState)) {
                 updateActivityState(deviceId, state, deviceState.getLastActivityTime());
                 if (deviceState.getLastInactivityAlarmTime() != 0L && deviceState.getLastInactivityAlarmTime() >= deviceState.getLastActivityTime()) {
                     deviceState.setLastInactivityAlarmTime(0L);
@@ -425,7 +425,7 @@ public class DefaultDeviceStateService extends AbstractPartitionBasedService<Dev
 
     void checkStates() {
         try {
-            final long ts = System.currentTimeMillis();
+            final long ts = getCurrentTimeMillis();
             partitionedEntities.forEach((tpi, deviceIds) -> {
                 log.debug("Calculating state updates. tpi {} for {} devices", tpi.getFullTopicName(), deviceIds.size());
                 Set<DeviceId> idsFromRemovedTenant = new HashSet<>();
@@ -455,7 +455,7 @@ public class DefaultDeviceStateService extends AbstractPartitionBasedService<Dev
     }
 
     void reportActivityStats() {
-        try{
+        try {
             Map<TenantId, Pair<AtomicInteger, AtomicInteger>> stats = new HashMap<>();
             for (DeviceStateData stateData : deviceStates.values()) {
                 Pair<AtomicInteger, AtomicInteger> tenantDevicesActivity = stats.computeIfAbsent(stateData.getTenantId(),
@@ -798,7 +798,7 @@ public class DefaultDeviceStateService extends AbstractPartitionBasedService<Dev
         if (persistToTelemetry) {
             tsSubService.saveAndNotifyInternal(
                     TenantId.SYS_TENANT_ID, deviceId,
-                    Collections.singletonList(new BasicTsKvEntry(System.currentTimeMillis(), new LongDataEntry(key, value))),
+                    Collections.singletonList(new BasicTsKvEntry(getCurrentTimeMillis(), new LongDataEntry(key, value))),
                     new TelemetrySaveCallback<>(deviceId, key, value));
         } else {
             tsSubService.saveAttrAndNotify(TenantId.SYS_TENANT_ID, deviceId, SERVER_SCOPE, key, value, new TelemetrySaveCallback<>(deviceId, key, value));
@@ -809,13 +809,17 @@ public class DefaultDeviceStateService extends AbstractPartitionBasedService<Dev
         if (persistToTelemetry) {
             tsSubService.saveAndNotifyInternal(
                     TenantId.SYS_TENANT_ID, deviceId,
-                    Collections.singletonList(new BasicTsKvEntry(System.currentTimeMillis(), new BooleanDataEntry(key, value))),
+                    Collections.singletonList(new BasicTsKvEntry(getCurrentTimeMillis(), new BooleanDataEntry(key, value))),
                     new TelemetrySaveCallback<>(deviceId, key, value));
         } else {
             tsSubService.saveAttrAndNotify(TenantId.SYS_TENANT_ID, deviceId, SERVER_SCOPE, key, value, new TelemetrySaveCallback<>(deviceId, key, value));
         }
     }
 
+    long getCurrentTimeMillis() {
+        return System.currentTimeMillis();
+    }
+
     private static class TelemetrySaveCallback<T> implements FutureCallback<T> {
         private final DeviceId deviceId;
         private final String key;
diff --git a/application/src/test/java/org/thingsboard/server/service/state/DefaultDeviceStateServiceTest.java b/application/src/test/java/org/thingsboard/server/service/state/DefaultDeviceStateServiceTest.java
index b06bbab0de..d03771cde3 100644
--- a/application/src/test/java/org/thingsboard/server/service/state/DefaultDeviceStateServiceTest.java
+++ b/application/src/test/java/org/thingsboard/server/service/state/DefaultDeviceStateServiceTest.java
@@ -54,6 +54,7 @@ import java.util.Collections;
 import java.util.List;
 import java.util.Map;
 import java.util.UUID;
+import java.util.concurrent.atomic.AtomicLong;
 import java.util.stream.Stream;
 
 import static org.assertj.core.api.Assertions.assertThat;
@@ -356,6 +357,56 @@ public class DefaultDeviceStateServiceTest {
         verify(telemetrySubscriptionService, times(1)).saveAttrAndNotify(any(), eq(deviceId), any(), eq(ACTIVITY_STATE), eq(isActive), any());
     }
 
+    @ParameterizedTest
+    @MethodSource("provideParametersForDecreaseInactivityTimeout")
+    public void givenTestParameters_whenOnDeviceInactivityTimeout_thenShouldBeInTheExpectedStateAndPerformExpectedActions(
+            boolean activityState, long newInactivityTimeout, long timeIncrement, boolean expectedActivityState
+    ) throws Exception {
+        // GIVEN
+        long defaultInactivityTimeout = 10000;
+        initStateService(defaultInactivityTimeout);
+
+        var currentTime = new AtomicLong(System.currentTimeMillis());
+
+        DeviceState deviceState = DeviceState.builder()
+                .active(activityState)
+                .lastActivityTime(currentTime.get())
+                .inactivityTimeout(defaultInactivityTimeout)
+                .build();
+
+        DeviceStateData deviceStateData = DeviceStateData.builder()
+                .tenantId(tenantId)
+                .deviceId(deviceId)
+                .state(deviceState)
+                .metaData(new TbMsgMetaData())
+                .build();
+
+        service.deviceStates.put(deviceId, deviceStateData);
+        service.getPartitionedEntities(tpi).add(deviceId);
+
+        given(service.getCurrentTimeMillis()).willReturn(currentTime.addAndGet(timeIncrement));
+
+        // WHEN
+        service.onDeviceInactivityTimeoutUpdate(tenantId, deviceId, newInactivityTimeout);
+
+        // THEN
+        assertThat(deviceState.getInactivityTimeout()).isEqualTo(newInactivityTimeout);
+        assertThat(deviceState.isActive()).isEqualTo(expectedActivityState);
+        if (activityState && !expectedActivityState) {
+            then(telemetrySubscriptionService).should().saveAttrAndNotify(
+                    any(), eq(deviceId), any(), eq(ACTIVITY_STATE), eq(false), any()
+            );
+        }
+    }
+
+    private static Stream<Arguments> provideParametersForDecreaseInactivityTimeout() {
+        return Stream.of(
+                Arguments.of(true, 1, 0, true),
+
+                Arguments.of(true, 1, 1, false)
+        );
+    }
+
     @Test
     public void givenStateDataIsNull_whenUpdateInactivityTimeoutIfExpired_thenShouldCleanupDevice() {
         // GIVEN