Will Filing Status Be Portable? Tax Implications of Interstate Recognition of Same-Sex Marriage

Same-sex marriage is a contentious issue in the United States today. On both the federal and state levels, all three branches of government find themselves addressing the rights of gay and lesbian couples. Politicians readily announce their opinions on whether same-sex couples should be able to marry, adopt children, and receive health benefits from a partner's employer. In fact, at least thirty-seven states have enacted constitutional or statutory bans on same-sex marriages. On the federal level, Congress passed (and President Clinton signed) the so-called Defense of Marriage Act in 1996, defining marriage for all federal purposes as the union of one man and one woman. Several states stand out for their attempts to offer equal marriage rights to same-sex couples. Massachusetts makes no distinction between same-sex and opposite-sex marriages, and is currently the only state in which same-sex unions are recognized as marriages. Other forms of same-sex unions are recognized in California, Connecticut, the District of Columbia, Maine, New Jersey, and Vermont although these unions are called civil unions or domestic partnerships. Same-sex marriage cases are also working their way through numerous other state court systems. Federal and state income taxation causes headaches for every American, but partners to same-sex unions face additional difficulties in complying with the tax laws. A basic tax distinction for income tax purposes is whether the taxpayer is married or single, but this can be a complicated question for same-sex partners. They may be single (in the federal government's eyes), married (in Massachusetts, for example), or neither: Partners to a civil union or domestic partnership are neither single nor married. These questions are compounded if a same-sex couple moves to a different state. Problems of recognition and classification which may have been clear in the couple's first home state are again thrown into disarray when they move to a state with different marriage recognition laws. This comment examines the intersection of same-sex marriage, conflicts of law, and taxation. Because the legal terrain surrounding same-sex relationships is highly contested and in seemingly constant change, this comment will not attempt to provide a comprehensive picture of the tax issues facing same-sex couples. Rather, it will use the current legal status of same-sex couples in Massachusetts, Connecticut, Vermont, and California to show, by way of example, the types of state and federal tax problems that similarly-situated couples in other jurisdictions may face in the future. Part I examines the same-sex union laws of Massachusetts, Vermont, California, and Connecticut and the state income tax filing requirements for same-sex couples within each of those states. Part II sketches a picture of interstate marriage recognition generally in the United States, exploring why some marriages are void when a couple steps across the state line. Part III investigates how same-sex couples from Massachusetts, Vermont, California, or Connecticut would file their taxes if they moved to various other states.