Equality or Dysfunction? State Tax Law in a Post-Windsor World

27 Pages Posted: 13 Mar 2014

See all articles by Nicholas A. Mirkay

Nicholas A. Mirkay

William S. Richardson School of Law, University of Hawaii

Date Written: March 11, 2014


Depending on one’s religious and political proclivities, the United States Supreme Court’s decision in United States v. Windsor can either been seen as a progressive step towards equality or a troublesome departure from traditional marriage norms. Notwithstanding, from a federal tax perspective, the Windsor decision clearly raised a myriad of issues that spanned virtually the entire Internal Revenue Code (the “Code”), including but not limited to income taxes (including filing status), estate and gift taxes, payroll taxes, and the tax treatment of retirement account contributions and social security benefits. In the aftermath of Windsor, the Internal Revenue Service (“IRS”) was left with a quandary in administering marital-status-dependent Code provisions: should it base its administration of the Code on the taxpayer’s valid marriage in the state in which it was performed (commonly referred to as the “state of celebration” test) or the taxpayer’s state of residence or domicile (commonly referred to as the “state of residence” test)? The IRS resolved most of the federal tax issues raised by Windsor in its issuance of Revenue Ruling 2013-17, which chiefly adopted a state of celebration test for income and other tax purposes. However, the ruling did not extend to quasi-marital statuses, such as domestic partnerships and civil unions, resulting in federal tax non-recognition and complexities for couples in those legally recognized relationships.

Windsor also raised innumerable state and local taxation issues, particularly for the majority of the states that outright ban, or otherwise do not recognize, gay marriages. The Windsor decision’s failure to completely repeal all provisions of the Defense of Marriage Act (“DOMA”), specifically Section 2, permits states to continue such bans or lack of recognition, resulting in significant state and local tax complexities for same-sex couples that reside in such states but chose to marry in one of the seventeen states (and District of Columbia) that permit it. Thus, a post-Windsor world remains complex and uncertain for a majority of married same-sex couples. As with federal taxation, for couples in a domestic partnership or civil union, their state and local taxation issues remain much as they did prior to Windsor and Revenue Ruling 2013-17 – complex and uncertain.

Keywords: taxation, state and local tax, same-sex marriage

Suggested Citation

Mirkay, Nicholas A., Equality or Dysfunction? State Tax Law in a Post-Windsor World (March 11, 2014). Creighton Law Review, Vol. 47, No. 2, 2014. Available at SSRN: https://ssrn.com/abstract=2407776

Nicholas A. Mirkay (Contact Author)

William S. Richardson School of Law, University of Hawaii ( email )

2515 Dole Street
Honolulu, HI 96822-2350
United States
8089569435 (Phone)

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