On Tuesday, I wrote about the tax consequences to married same-sex couples of Utah’s decision not to recognize its same-sex marriages for the duration of the stay. The quick version is, that decision, combined with the federal government’s decision to recognize such marriages, was going to force Utah’s same-sex married couples to prepare dummy returns, substantially increasing the expense of filing their tax returns.
But, in the fast-moving world of marriage equality, that is no longer the case. At least for 2013 taxes. On Thursday, Utah’s State Tax Commission announced that same-sex couples who file their 2013 federal tax returns as married can also file as married for state income tax purposes.
This means that any of the couples who married between December 20 and 31, 2013, will file their Utah income tax returns as married. But it’s not just that: any same-sex Utah couple who married in a different state on or before December 31, 2013,[fn1] will file as married for Utah tax purposes, even though Utah doesn’t recognize their marriage for any other purpose.[fn2]
(Why December 31? Because for federal income tax purposes, as long as you were married on the last day of the year, you file as married for that year; conversely, if you got divorced on December 31, you would file as single for the year. Though it seems strange, it makes administrative sense: dividing income into pre- and post-marriage (or -divorce) time periods would be really cumbersome.)
As a result of the State Tax Commission’s decision, same-sex couple in Utah will not have to prepare dummy returns; rather, they’ll face the same choices and requirements as any other couple in Utah that was married on or before December 31, 2013.
So how can the State Tax Commission ignore Gov. Herbert’s declaration that Utah would not recognize the marriages? I’m not entirely sure; I’m not a Utahn or a Utah attorney, and am not terribly familiar with its legal regimes. According to the State Tax Commission’s website, though, the State Tax Commission has four tax commissioners, appointed by the Governor with the consent of the State Senate. Those commissioners, under the Utah state constitution, administer and supervise Utah’s tax laws. Once appointed, they don’t appear to be part of the executive branch of Utah government—their existence and duties are laid out in Article 13 of the Constitution (“Revenue and Taxation”), not Article 7 (“Executive Department”). My assumption, then, is that the commissioners have no obligation to follow the executive policies that haven’t been codified by the legislative branch.
One caveat to keep in mind: this is a one-year thing. The State Tax Commission will decide what to do for future years as the appeals play out. That said, if the 10th Circuit or the Supreme Court nullify the marriages that have happened, while same-sex married couples may have to file amended returns for 2013, but they will not face civil penalties if their tax liability goes up solely as a result of the change in filing status.
[fn1] In its press release, the Utah Tax Commission says anyone “whose marriages were solemnized in other states before Dec. 31, 2013,” but that’s clearly a typo. It should read on or before.
[fn2] This is actually a really big deal: Utah is the third state, after Colorado and Oregon, that doesn’t recognize same-sex marriage but allows couples who file as married for federal purposes also file as married for state purposes.