RICHMOND, Va. — The state of Virginia has released new tax guidelines for legally married same-sex couples, establishing what is being called some of the most complicated and harshest policies by any state tax department against same-sex couples.
According to the Virginia Taxation Department guidelines, 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 Virginia. 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 same-sex 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 Virginia ACLU has also cried foul on the department’s move.
“This bulletin reaffirms the Commonwealth’s ongoing hostility toward LGBT Virginians, including legally married same-sex couples.” said Claire Guthrie Gastañaga, Executive Director of the ACLU of Virginia, in a statement.
“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,” said Gastañaga.
“This policy will hurt a lot of Virginia’s families and businesses and will bode poorly for the commonwealth as a whole,” said James Parrish, Executive Director of Equality Virginia, in a statement. “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.
Attempts by GayRVA to contact Governor-elect 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.
Joel Davison told the Post the issue was a matter of the state’s constitution, which is specific in its denial of any benefits to any non-traditional marriage.