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Same-Sex Partner Benefits: San Francisco Moves To Fix Tax Penalty

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San Francisco's Board of Supervisors passed a bill Tuesday ensuring same-sex couples who work for the city will pay the same in health care costs as their straight counterparts.

Presently, the spouses of heterosexual government workers nationwide are exempt from having to pay taxes on their heath insurance benefits. Since the federal government doesn't officially recognize gay marriage, same-sex couples aren't afforded the same privileges, and those benefits are treated as taxable income. It can cost up to $1,750 per year in additional tax burden for the nearly 400 spouses and domestic partners of San Francisco city employees.

"As a city, we should not stand idle as contributing and equal members of our society continue to be discriminated against purely because of their sexual orientation," said Supervisor Mark Farrell, who introduced the legislation, in a statement. "San Francisco has always been a leader in supporting our LGBT community, and this discrimination in our federal tax code has cost individuals thousands and thousands of dollars each year."

Farrell, who told CBS San Francisco that having the city reimburse workers for that expense was "an issue of equality," estimates the program's yearly cost to the city to be just over $600,000.

By passing this measure, San Francisco joins the cities of Cambridge, Mass., and Hallendale Beach, Fla., as well as companies like Facebook and Google, that have also pledged to compensate the spouses of their same-sex employees for lost medical expense deductions.

The need for this bill would evaporate overnight if the U.S. Supreme Court decides to overturn the Defense Of Marriage Act, a case it's expected to rule on in the coming months. Overturning DOMA would require the federal government to begin recognizing same-sex unions.

In a brief submitted to the court in February, a coalition of nearly 300 companies, including Facebook and Google, argued that the government's denial of benefits to the same-sex partners of their employees is bad for business because "[it] forces us to treat one class of our lawfully married employees differently than another, when our success depends upon the welfare and morale of all employees."

Inspired by Farrell's San Francisco bill, California Assemblymember Phil Ting, who previously served as the city's Assessor-Recorder, has proposed a similar measure that would do for the entire state what Farrell's proposal accomplishes at the local level.

"We can't end DOMA from the statehouse, but we can make sure that California is not part of the problem," Equality California Executive Director John O'Connor, whose organization is cosponsored Ting's bill, told The Advocate at a press conference earlier this month. "Equality California is so pleased to champion this legislation to right the wrong of loving couples being unfairly taxed."

San Francisco's law is scheduled to go into effect on July 1.

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