06/22/2011 06:50 pm ET Updated Aug 22, 2011

Illinois Civil Union Tax Loophole: Why Separate Is Never Equal

Opponents of full marriage equality for same-sex couples often ask why the LGBT community can't simply be happy with separate institutions and groupings of rights like civil unions and domestic partnerships. Illinois recently became one such state to move to offer statewide protections supposedly equal, but separate, to marriage with the passage of the 'Illinois Religious Freedom Protection and Civil Union Act.' The act reads broadly about what it provides for same-sex couples, stating:

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)

It seems pretty straightforward. Anyone in a civil union gets the same state benefits as someone who is married. The act even puts in purposefully broad language about being 'liberally construed' to implement the purpose and spirit of the law. It seems, however, that everyone in the state government, specifically the Illinois Department of Revenue, didn't get that impression from the law.

The Dept. of Revenue posted the rather surprising reading of the civil union act on its webpage, saying that couples in civil unions "may not file joint Illinois returns" and the new law "did not change the Illinois income tax laws." Their reasoning? The federal Defense of Marriage Act (DOMA):

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.

So despite the broad and obvious language of the civil union act saying that couples should get all the same benefits of married spouses, the Dept. of Revenue disagrees and is going with DOMA as the excuse. This exclusion of state tax benefits are a troubling interpretation of the civil unions act, to be sure, and one that highlights the inequities and confusions that civil unions and other "non-marriage" arrangements can create for couples entering into them.

Anthony Niedwiecki, a law professor at Chicago's John Marshall Law School who teaches sexual orientation issues and the law, breaks down how this interpretation doesn't apply the tax laws equally. Even though their argument is that state tax forms can only be filed jointly if they are first filed together federally, there is contradiction even on that issues within their own statute:

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."

Besides the obvious contradiction in the tax law is the obvious narrow reading of the civil union law itself. As quoted above, the law provides a liberal and broad application granting all the same rights and responsibilities to civil union couples as married ones. The civil union act goes even further to make sure its meaning and application are clear, stating:

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

There isn't wiggle room in that reading at all. Those same legal benefits provided for both groups includes the joint filing of state taxes. As Professor Niedwiecki points out:

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.

It is clear that the contradictory, narrow reading of the civil union law by the Dept. of Revenue needs to be addressed and fixed quickly, whether it be by clarification of the law from state officials or a legislative fix. Joint state tax filings are an important part of the benefits supposedly provided to same-sex couples in civil unions. What is also clear is that this is a glaring example of why separate is never equal. Creating new, separate, and different levels of rights and recognition among committed couples only creates further inequity, confusion, and discord even internally among states that seek to expand rights.

We decided long ago that segmenting minorities out for separate treatment can never create equality. It's long past time we apply that to all our citizens.

(Full Disclosure: Professor Anthony Niedwiecki is my husband, who I am in a civil union with in the state of Illinois)

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