Virginia Tax Department Releases “Hateful” Codes for Married Same-sex Couples
In what is being called one of the harshest moves by any state’s Tax Department, the Virginia Taxation Department has released complicated and non-inclusive guidelines for legally married same-sex couples.
The guidelines explain the state will not accept any jointly filed forms for same-sex couples legally married in other states, nor will it allow businesses to take deductions provided by the Federal Government for providing benefits for same-sex spouses.
“Virginia has by far the most hateful and stringent guidelines for married same-sex couples,” said Kate Fletcher, a local tax attorney and LGBT advocate. “Far more than any other non-recognition state.”
Fletcher described some of the ways the new code will affect same-sex couples in VA. If you have student loan interest deductions if you file single, you might not qualify because you make too much. But if you aggregate between you and your spouse, with one high earner and one low earner, you might qualify. But when you go to file at the state level, you have to back out that deduction, according to Fletcher.
“You have to recalculate everything.”
But these new rules do more than affect individual couples in the state. A section of the new guidelines specifies how private businesses cannot claim deductions for providing benefits to same-sex spouses:
Under the newly established federal policy, employers may claim a federal deduction for payments
of fringe benefits to employees’ same-sex spouses and dependents. Since Virginia
does not recognize same-sex marriage, these businesses must adjust the deductions
they claim for Virginia income tax purposes accordingly.
“It does not bode well at all for the Virginia is “Open for Business” tag line,” said Fletcher.
The VA ACLU has also cried foul on the departments move.“This bulletin reaffirms the Commonwealth’s ongoing hostility toward gay, lesbian, bisexual, and transgender (LGBT) Virginians, including legally married same-sex couples.” said Claire Guthrie Gastañaga, Executive Director, ACLU of Virginia in a press release. “Instead of embracing the U.S. Supreme Court decision that found the Defense of Marriage Act unconstitutional, Virginia has signaled its continued opposition to basic fairness by singling out same-sex married couples for discriminatory treatment under state tax laws.”
Equality Virginia has also voiced their concern over the law. ED James Parrish said in a press release “This policy will hurt a lot of Virginia’s families and businesses and will bode poorly for the commonwealth as a whole. Businesses will have even less incentive to stay in or move to Virginia, and many households will have less money to spend in their communities.”
Other non-recognition states, or states without legal marriage between same-sex couples, have approached the awkward situation in different ways. Missouri has stood out as an example of a state doing all it can for same-sex couples despite banning the unions in their state constitution.
Missouri Gov. Jay Nixon (D) signed an executive order telling his state’s taxation department to accept joint filings by same-sex couples.
“Many Missourians, including myself, are thinking about these issues of equality in new ways and reflecting on what constitutes discrimination. To me, that process has led to the belief that we shouldn’t treat folks differently just because of who they are,” Nixon told the St. Louis Post-Dispatch. “I think if folks want to get married, they should be able to get married.”
Attempts by GayRVA to contact Governor Terry McAuliffe’s office were not returned, however his transition team told the Washington Post the campaign was aware of the issue, but hadn’t come to any conclusions yet.
The Washington Post also spoke with the VA Taxation Department spokesman Joel Davison who said the issue was a matter of the state’s constitution which is specific in its denial of any benefits to any non-traditional marriage.
All of these new rules came into existence following the partial repeal of DOMA over the summer. While the federal government has altered its policies to accept joint returns from legally married same-sex couples, the individual states are still allowed to have their own tax laws.
The new policy also addresses Supplemental Security Income claims based on same-sex relationships.March 19, 2015
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