Gay rights activists in Utah celebrate changes to federal tax rules

Posted at 9:55 PM, Aug 29, 2013
and last updated 2013-08-29 23:55:51-04

SALT LAKE CITY -- Gay rights activists in Utah celebrated major changes to federal tax rules on Thursday.

Two months after the Supreme Court struck down the Defense of Marriage Act, the Treasury Department ruled that legally married same-sex couples will be treated as married for federal tax purposes, regardless of whether or not they live in a state that recognizes same-sex marriage.

“I think it's great news for every gay couple in Utah who is legally married in one of the 13 states where they allow it,” said Michelle Turpin, who is a Salt Lake City-based tax attorney.

The gay rights activist is now tasked with navigating same sex couples through the process of filing a joint federal tax return, a lot of new paperwork she's looking forward to.

“My phone has been ringing off the hook,” Turpin said. “A lot of people are wondering if they should go to some other state and get married now.”

The new IRS regulations will apply to all federal taxes, including income, gift and estate taxes. However, how it will be implemented in Utah is still unclear.

“In Utah it means there's going to be a lot of confusion,” Turpin said.

The state's income tax system is tied to the federal system, which Turpin views as problematic because of wording in a portion of the tax code, stipulating returns from only a "husband and wife."

“I think they're either going to have to have a section that deals with returns by same-sex married couples,” Turpin said, “Or they're going to have to change the language in this particular code section."

If not, Turpin believes same-sex couples could potentially have to fill out a "mock" federal form, as if they're not married, in order to get their taxable income for state purposes.

But it's too soon to say what will happen, according to Utah Tax Commission Chairman Bruce Johnson.

“The fact is we just don't know,” he said. “That's why we asked the Attorney General for an opinion.”

According to Johnson, if the commission went by typical procedure, in the absence of the new Constitutional amendment, they would likely follow the federal government. However, how they would shape Utah's current codes is still unknown.

“We may have to ask the legislature to change some statutory language this session,” he said.

There is also the possibility of modeling what they do after an existing exception for married couples who file jointly but do not live in Utah together.

“When we have spouses that are filing jointly for federal purposes, but they live in different states, they may file a separate return in Utah, so that would be possibility,” Johnson said.

Despite the uncertainties, Turpin said Thursday’s announcement is a clear win for same sex couples.

“It's a huge victory on many levels,” she said.