Indiana Department of Revenue's Administrative Requirement That Same-Sex Couples File Separate Tax Returns Provides Equal Protection Claim Against State

When the U.S. Supreme Court ruled in U.S. v. Windsor earlier this year that a provision of the federal Defense of Marriage Act that required the IRS to treat the surviving spouse of a same-sex marriage differently for federal inheritance tax purposes than the surviving spouse of a traditional spouse was unconstitutional, the IRS immediately revised its regulations to permit same-sex couples to file joint tax returns. That posed a problem for states like Indiana which impose a state income tax that picks up the adjusted gross income tax calculation on a married couple's federal income tax return as the basis for calculating the tax owed by the couple on their jointly filed state tax return. Because Indiana law bars the recognition of same-sex marriages entered into in other states and countries where they are legally recognized, the Indiana Department of Revenue has determined that it will not permit same-sex couples residing in Indiana who file joint federal tax returns to file a joint state income tax return. The Star's Jon Murray describes the Department's new ruling:

The Indiana Department of Revenue will require each member of a same-sex couple to file a single-filer state tax return. But officials stopped short of creating a tax worksheet to help married same-sex couples recalculate their joint income before they file separate state tax forms, as Wisconsin and Michigan have done.

That is the approach recommended by the nonpartisan Tax Foundation to help reduce confusion.

Department of Revenue spokesman Robert Dittmer says the agency's guidance simply follows Indiana's same-sex marriage ban and does not recognize same-sex marriages granted in other states.

Gay-rights advocacy group Indiana Equality Action says the new tax dynamic creates an attempted "separate but equal" system in Indiana that could spur a new legal challenge of the gay marriage ban. The group's attorneys have been researching the matter . . .  

The state's new guidance, issued on the Department of Revenue's website this afternoon, advises couples who file federal returns with a married filing status to also fill out sample federal single-filer forms. To do so, they must divide their joint income.

They then can refer to those sample federal returns when they fill out Indiana's tax return for single-filers. The website offers some advice for dividing up income and specifies which lines on the federal form affect the state return . . .

There's no question that this disparate tax treatment of same-sex couples will lead to a plethora of lawsuits being filed across the country in states like Indiana which bar recognition of same-sex marriages challenging the constitutionality of the state laws on equal protection grounds. Indiana's law creates the "second-tier marriage" tax inequality based solely on a married couple's sexual orientation, a classification made for reasons other than "government efficiency" that the Supreme Court ruled in U.S. v. Windsor violates the 5th Amendment's equal protection clause, which the 14th Amendment makes equally applicable to the states.