New federal Internal Revenue Service rules have created a Catch 22 situation for Louisiana’s gay community.
On the one hand, Louisiana law requires taxpayers to use the same status on state tax returns as they do on federal tax returns. The state Civil Code also forbids same-sex marriages and doesn’t recognize such unions in Louisiana if legally entered in another state.
The IRS last week released Revenue Ruling 2013-72 that allows same-sex married couples to use “married filing jointly” status on their federal tax returns, the same as heterosexual couples, even in states that do not recognize gay marriage. For most middle-income taxpayers, using the joint status, rather than single status, translates to owing less taxes.
“This ruling also assures legally married same-sex couples that they can move freely throughout the country that their federal filing status will not change,” Jacob J. Lew, secretary of the U.S. Department of the Treasury, said in a statement accompanying the release of the rules.
The new rules, which amount to a policy shift in response to a U.S. Supreme Court ruling in June, applies to 2013 tax returns, due in April. It allows same-sex couples to amend returns from the three previous tax years. It applies only to couples legally married but not to other formalized relationships recognized in some states, such as “registered domestic partnerships.”
At least 13 states, Washington, D.C., five Native American tribes and several countries issue same-sex marriage licenses. Thirty-five states prohibit such unions.
Louisiana voters approved a constitutional amendment — with a 78 percent majority — defining marriage as being between a man and a woman, said Gene Mills, who heads the Louisiana Family Forum, a Baton Rouge-based advocacy group that supports “traditional family” policies.
“The Louisiana Marriage Amendment is undermined by the unlawful actions of the Obama administration and the IRS,” Mills wrote in a prepared statement released in response to a request for an interview. “LFF strongly opposes the Obama administration’s federal bullying of Louisiana and our marriage laws.”
Christopher K. Odinet, an assistant professor of law focusing on the Louisiana civil code at the Southern University Law Center, said the state’s legal opposition to same-sex marriage limits what state government can do in light of the new IRS rules.
Basically, tax filers who take “married filing jointly” status on federal return, would have to create a dummy return as a single filer to get the necessary numbers to file on the state return, he said.
“Then, necessarily, they are violating the law,” Odinet said. Legislators and state officials “either have to change the way we file state returns so that they are not tied to the federal returns or there has to be a recognition of (same-sex married) couples.”
“This is an issue in probably 20 to 25 states around the country,” said Law Professor Patricia Cain, a national tax expert at Santa Clara University in California.
The IRS regulation may be pressuring some states toward a more uniform rule regarding same-sex marriage. “Because of this nudge from the U.S. Supreme Court, states that are on the borderline will go ahead and enact a same-sex marriage act,” Cain said.
Many taxing authorities around the country say that they plan to follow the federal rule until their state’s legislatures fix the legal wording, she said. Other states likely would approve same-sex marriages.
Louisiana, Georgia, Alabama, Utah and Virginia all have both strict anti-gay marriage laws and similar personal income tax setups, she said.
State Rep. Jared C. Brossett, D-New Orleans, said something needs to be changed, either the tax code or the civil laws.
“I’m looking forward to seeing what the governor and the administration is going to say,” Brossett said. “I would hope that there would be no further burdens placed on the community relative to their equal protections and tax benefits.”
“I would think there would be some (legislation brought) by both sides,” said state Rep Frank A. Hoffmann, R-West Monroe. “But we’re a pretty conservative state and don’t think it’d have much chance of actually being dealt within our laws.”
“This is a through-the-looking-glass problem,” said Susan Sommer, director of constitutional litigation at Lambda Legal. The New York-based civil-rights organization focuses on litigation and policy concerning the lesbian, gay, bisexual and transgender communities.
“The people in Louisiana are going to need to turn to the state and ask for guidance for what the state wants them to do,” Sommer said.
Both Jindal and Tim Barfield, who heads Jindal’s tax collecting efforts, responded to requests for interviews with responses from their respective press offices. Jindal’s press office said Barfield’s office would handle it. Barfield, the secretary for the state Department of Revenue, released a prepared statement saying his office was reviewing the issue to determine what would be best to do.
Joe Traigle, a Baton Rouge businessman who was revenue secretary when Louisiana revamped its tax code and set up the system that piggybacks the federal tax law, said in a prepared statement: “Common sense and fairness dictate that every American citizen should be treated the same under the tax laws of both the United States and Louisiana. There is no case to be made for any different treatment of any American citizen when the equal treatment provision of our constitution is applied, end of story.”