By Anthony Niedwiecki, The John Marshall Law School
In the push for marriage equality, LGBT activists often point to hospital visitation, inheritance rights, and tax benefits as some of the rights that are denied to same-sex couples. In response, some states have extended some of the rights associated with marriage to same-sex couples through civil unions or domestic partnerships. Illinois is one of the most recent states to provide same-sex couples the “same legal obligations, responsibilities, protections, and benefits as are afforded or recognized by the law of Illinois to spouses” by establishing civil unions. 750 ILCS 75/20. So it came as a surprise when the Illinois Department of Revenue announced on its webpage that the new civil union law “did not change the Illinois income tax laws,” and specifically stated that couples in a civil union “may not file joint Illinois returns.”
The Illinois Department of Revenue bases its reasoning on the requirement that a couple must be able to file their federal taxes jointly first, and same-sex couples are prohibited from jointly filing their federal income taxes because of the “Defense of Marriage Act”:
IITA Section 502(c) permits joint returns only when a joint return is filed federally. The federal Defense of Marriage Act (which is being challenged in the courts) does not allow joint returns by partners to a civil union, so the IITA does not allow joint returns either.
As the first sign that the department’s analysis is weak, this statement alone is not completely accurate. In the same section of the law cited by the department to support its analysis, there is another part that allows a married couple to file joint state tax returns when they are not required to file federal taxes. 35 ILCS 502/5 (c)(2) states:
If neither spouse is required to file a federal income tax return and either or both are required to file a return under this Act, they may elect to file separate or joint returns and pursuant to such election their liabilities shall be separate or joint and several.
This part of the statute is in direct contradiction to its statement that section 502 allows joint state returns “only when a joint return is filed federally” because it specifically allows a couple to file jointly when they haven’t filed any federal taxes at all. Regardless of this misstatement, the key section the department is likely using as a basis for its policy is 35 ILCS 502/5 (c)(1)(C), which requires a couple to file Illinois tax returns separately if they file their federal taxes separately:
[I]f the federal income tax liability of either spouse is determined on a separate federal income tax return, they shall file separate returns under this Act.
Obviously, same-sex couples must file their federal returns separately because of the “Defense of Marriage Act,” which prohibits the federal government from recognizing same-sex relationships. The problem with the department’s interpretation is that it contradicts the clear purpose and language of Illinois’ civil union law, known as the “Illinois Religious Freedom Protection and Civil Union Act.” Two sections of this law make it clear that all of the rights and obligations under Illinois law that are afforded to spouses are equally provided to those who enter into a civil union. The two relevant sections state:
This Act shall be liberally construed and applied to promote its underlying purposes, which are to provide adequate procedures for the certification and registration of a civil union and provide persons entering into a civil union with the obligations, responsibilities, protections, and benefits afforded or recognized by the law of Illinois to spouses. 750 ILCS 75/5 (emphasis added).
A party to a civil union is entitled to the same legal obligations, responsibilities, protections, and benefits as are afforded or recognized by the law of Illinois to spouses, whether they derive from statute, administrative rule, policy, common law, or any other source of civil or criminal law. 750 ILCS 75/20 (emphasis added).
The law seems pretty clear here. The Illinois tax laws should be interpreted and applied “liberally” to include the right to file taxes jointly. This is one of the rights afforded to spouses under state law, and the civil union law makes it clear that all efforts should be made to provide equal rights to same sex couples. In fact, the states that have adopted civil unions or their equivalent allow same-sex couples to jointly file state taxes. (For example, see New Jersey, California, Oregon). Jointly filing taxes is one of the main benefits that LGBT activists cite when they push for marriage or civil union rights in a state, and these other states have fixed this inequality in applying their tax laws to same-sex couples.
Principles of statutory construction in Illinois also support the application of state tax benefits to couples in a civil union. Earlier this month, the ACLU did a thorough analysis of how basic rules of statutory interpretation apply to the civil unions bill to counter an argument that the law should be construed narrowly. The same reasoning applies to the tax statute. Specifically, the civil union law must be interpreted in light of “the purpose and necessity for the law, the evils sought to be remedied and the goals to be achieved, and the consequences that would result from construing the statute one way or the other.” Bubble v. Bi-State Development Agency, 238 Ill. 2d 262, 268 (2010). The purpose of the civil union bill is clearly laid out in the sections quoted above, granting ALL of the rights to those in a civil union that are provided to spouses, which should include tax benefits. In addition, a reference to taxes was made on the state house floor in support of the bill:
Representative Osterman: “Why shouldn’t these two Illinoisans be granted the same civil benefits that my wife and I have, benefits related to property, pension, taxes, health insurance, and health care decisions.”
Did the department misinterpret the law or are other reasons motivating the new policy? What is becoming clear by the department’s policy is that civil unions will never be the equivalent of marriage. The State of Illinois has a chance to correct this inequity before tax season starts next January—I hope they make it a priority.