On Oct. 9, 2013, the Utah Tax Commission issued guidance to Utah taxpayers denying joint filing status for same-sex married couples because Utah’s constitution did not recognize same-sex marriages. However, in light of the ruling in Kitchen v. Herbert (D. Utah, Dec. 20, 2013), in which a federal judge enjoined Utah from enforcing its constitutional ban on same-sex marriage, the Tax Commission has issued new guidance replacing its prior guidance regarding the issue of joint filing status for same-sex married couples.
The Tax Commission’s new guidance, which was issued on Jan. 15, 2014, provides that same-sex couples who are eligible to file a joint federal income tax return and who elect to file jointly may also file a joint 2013 Utah Individual Income Tax return. The filing guidance is limited only to the 2013 tax year. Filing information for future tax years will be provided as court rulings and other information become available. The notice explains that if taxpayers are required to file amended 2013 tax returns as a result of any future court rulings, they will not be subject to penalties for any deficiencies resulting solely from following this guidance.
Kitchen v. Herbert has been appealed to the Tenth Circuit Court of Appeals. For 17 days, Utah was the 18th state in the nation to permit same-sex couples to marry. On Jan. 6, 2014, the U.S. Supreme Court stayed the injunction of the Utah District Court pending final disposition of the appeal to the Tenth Circuit. Due to the stay of the injunction, on Jan. 8, 2013, the Governor of Utah directed his cabinet that the state would not recognize same-sex marriages pending final determination by the courts. Interestingly, this directive apparently does not apply to the Tax Commission as the Tax Commission’s new guidance permitting same-sex married couples to file Utah income tax returns jointly was issued about a week later. American Civil Liberties Union of Utah filed a lawsuit on Jan. 21, 2013 regarding Utah’s refusal to recognize same-sex marriages entered into under Utah law before the injunction was stayed.
The Multistate Tax Update will continue to follow developments in state tax law in the wake of the Court’s ruling in United States v. Windsor (striking down Section 3 of the Defense of Marriage Act (DOMA) on grounds that the federal interpretation of "marriage" and "spouse" to apply only to heterosexual unions is unconstitutional under the Due Process Clause of the Fifth Amendment), as well as Revenue Ruling 2013-17 (holding, in part, that: (1) “husband” and “wife” include an individual married to a person of the same sex if the individuals are lawfully married under state law, and the term “marriage” includes such a marriage; and (2) a marriage of same-sex individuals that was validly entered into in a state whose law authorizes the marriage of two individuals of the same sex even if the married couple is domiciled in a state that does not recognize the validity of same-sex marriages). The Multistate Tax Update has seen and expects to continue to see a multitude of state legislation, rulings, guidance, and litigation ensuing as a result. If you have questions on how these holdings or other developments may affect you or your business, please contact us.
Click here to read the full text of the Utah Tax Commission guidance.