Why Idaho’s Tax Change For Married Gay Couples Could Set The State Up For A Lawsuit

Nov 6, 2013

Credit Samantha Wright / Boise State Public Radio

Legally married gay couples can file federal taxes together, regardless if it's legal in the state they live in, since the U.S. Supreme Court ruled that a ban on federal benefits for gay couples is unconstitutional.

Here in Idaho, the state doesn't recognize same-sex marriage. So the state's tax commission created a new rule on how same-sex couples file. That decision ultimately must get the "okay" from lawmakers, and that's where filing taxes may get tricky in Idaho. It also could lead to lawsuits and a closer examination of the state's constitutional ban on gay marriage.

In order to fill out the Idaho tax form, you need to fill out a federal 1040 form first. Idaho Tax Commissioner David Langhorst says that's how Idaho's tax law works.  

There’s another provision, this one in the Idaho Constitution, which says "a marriage between a man and a woman is the only domestic legal union that shall be valid or recognized in this state."

“And so,” says Langhorst, “we do not accept same sex couples, even if they were legally married in another state, we don’t accept them filing in Idaho, as per the Constitution.”

Those two laws came into conflict this year, when the Supreme Court and the IRS decided that legally married gay couples could file a joint IRS return, no matter what state they lived in. “This was a conflict in Idaho laws that would have made it a nightmare for certain taxpayers,” says Langhorst.

Gay couples would have filed as married on the federal form and sent it to the Idaho State Tax Commission. “We would be in a position of having to either break the law by accepting those returns,” says Langhorst, “or reject those returns, and that puts the taxpayer in jeopardy as a non-filer which is a very serious offense."

The Idaho State Tax Commission needed a solution before tax season. So, the four tax commissioners agreed to change the rules. Now, gay couples will fill out one federal form as a married couple. Then each person will fill out another 1040 form, filing as single or as a head of household. The joint version goes to the IRS. The single versions go to the Idaho Tax Commission.

The new rule is temporary. The Idaho Legislature will have to decide whether to keep it.

Sen. Jeff Siddoway is a Republican from Terreton, north of Idaho Falls. He chairs the Local Government and Taxation Committee. That’s where this new rule will go for a vote in January. 

He says the committee usually likes to conform with the federal government, when it comes to tax rules.  “Something like this, that’s certainly going to raise the ire of many legislators,” says Siddoway, “I am skeptical to say just exactly what will happen here.”

He says some lawmakers may vote against the rule, because they may see it as a validation of same-sex marriage. “That vote is going to be swayed by each individual’s definition of what a marriage is, and even though this is an effort to try to align and conform with the federal government, it still, I think, strikes many of us as unwarranted,” Siddoway says.

If the Legislature rejects the rule, the Tax Commission is stuck between conflicting state and federal rules.  But if the Legislature accepts the rule, Idaho could still face unwanted consequences. “You know we probably are susceptible to some court action and that’s just a personal opinion,” says Siddoway.

That’s an opinion shared by David Adler, director of the Andrus Center for Public Policy at Boise State University. Adler spends a lot of time studying the U.S. Constitution. He says forcing a separate group to file extra federal 1040 forms comes down to unequal treatment of adults. “What it really does is, is that it imposes extra work on same-sex couples,” says Adler.

He says that creates a two-tiered system, and a conflict with the 14th amendment. It prohibits states from passing or enforcing laws that deny equal protection to American citizens. “Those who are married lawfully in Idaho have the right to exercise different options with respect to how they file taxes,” says Adler. “Those who are married, and are same-sex couples, don’t have those same options under Idaho law and that’s what creates an equal protection problem.”

That problem, he predicts, will turn into lawsuits against the Idaho Tax Commission, and the State of Idaho. Adler says Idaho’s chances of winning are tiny, because when state law conflicts with federal law, federal law wins.

And if, or when, Idaho loses in court, state lawmakers may have to make some decisions about more than just taxes. “And this may well lead to a larger discussion on whether or not there ought to be a repeal of the constitutional amendment that bans same-sex marriage,” says Adler.

Until the Legislature acts next year, gay married couples in Idaho will have to follow the rules of the Idaho State Tax Commission and file their federal form twice. The State Tax Commission is working closely with software developers so same-sex couples can e-file their taxes under the new rules, leaving it to the computer to do much of the work.

Tax Commissioner David Langhorst says when commissioners came up with this rule, they weren’t thinking about politics. “Our focus right here is how do we make it the easiest, given the laws that are there now, for people to file their taxes,” says Langhorst.

Copyright 2013 Boise State Public Radio