With 2017 just around the corner and state policymakers beginning work on next year’s legislation in earnest, it’s worth pausing to review recent trends in state taxation to glean hints of what to expect in the year to...
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- Supreme Court Decides Same-Sex Marriage Estate Tax Case
Supreme Court Decides Same-Sex Marriage Estate Tax Case
This morning, the U.S. Supreme Court struck down part of the Defense of Marriage Act (DOMA) in United States v. Windsor (PDF of the opinion here). The plaintiff in the case is Edith Windsor, who wed Thea Spyer in 2007. Their same-sex marriage is recognized under New York law.
Spyer died in 2009, leaving her estate to Windsor. Federal law provides an estate tax exemption for surviving spouses, but DOMA Section 3 prevents the federal government from recognizing any marriage except that between a man and a woman. (DOMA Section 2, not challenged here, allows states to only recognize out-of-state marriages to conform to their definition of marriage.) Windsor sued for a refund in the amount of the extra tax she had to pay ($363,053) by not being eligible for the spousal exemption.
The District Court and the Court of Appeals held DOMA Section 3 to be unconstitutional and ordered the U.S. government to pay Windsor a refund. Today, the Supreme Court agreed in a 5 to 4 opinion.
Justice Anthony M. Kennedy, writing for the majority of himself, Justice Ruth Bader Ginsburg, Justice Stephen Breyer, Justice Sonia Sotomayor, and Justice Elana Kagan, concluded that it has historically been up to states to define marriage and family matters. He writes that it violates the Fifth Amendment guarantee of liberty (which includes equal protection) for a federal law to deny federal recognition to marriages recognized by the state, when that federal law is motivated by a desire to impose inequality in the eyes of the law. DOMA further frustrates state efforts to reduce legal inequality by passing state-level same-sex marriage laws. Kennedy’s opinion and reasoning resembles his opinion in Lawrence v. Texas ten years ago today, which struck down remaining state criminal anti-sodomy laws.
Chief Justice Roberts dissented, arguing that the Court does not have jurisdiction to take the case (the government chose not to defend it; the House Republicans stepped up to do so). Further, he says that DOMA’s purpose of preserving the at-one-time standard definition of marriage should not be read as an effort to impose inequality. He also notes that going forward, it is up to each state to define marriage as it sees fit.
Justice Antonin Scalia, joined by Justice Clarence Thomas, dissented, argued that the Court has no jurisdiction to hear the case, and he rejects the view that DOMA’s purpose was to hurt one group of people. He also says that the majority’s opinion can be used to strike down state-level bans on gay marriage. Chief Justice Roberts joined Justice Scalia’s opinion only as to the jurisdictional issue.
Justice Samuel Alito also dissented, agreeing with the majority that the Court could hear the case, but arguing that the Court should leave the recognition of new rights to the elected branches. Alito’s reasoning is that of judicial “deference” dating to the Progressive Era and FDR’s justices – the idea that if a right isn’t mentioned in the Bill of Rights, court should leave the matter to the elected branches. Alito would evaluate DOMA under generous “rational basis” review (was it irrational for Congress to enact it) and would find it valid. Justice Thomas joined Alito’s dissent except for the jurisdictional analysis.
The Court carefully limited the scope of its decision in its second-to-last sentence to states that currently recognize same-sex marriage. As a result of the decision, all federal spousal benefits are now extended immediately to same-sex couples legally married in states that recognize such marriages (which now include California, or at least parts of it, after today’s companion decision in Hollingsworth v. Perry). Aside from spousal health and survivor benefits for same-sex spouses of federal employees, this also means that same-sex couples should be permitted to file their federal taxes as married filing jointly, and enjoy the spousal survivor exemption for the estate tax.
The logic of the Court’s ruling is that DOMA is unconstitutional and always has been. Consequently, there may be a basis for same-sex couples to pursue some of these benefits and tax filing status retroactively to the date their marriage was recognized under state law. Stay tuned on that. How it affects immigration applications is certainly up in the air as well.
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