Politics & Policy

Montana

Montana Revenue Director: Same-sex couples barred from filing joint income tax returns even if legally married

Montana Capitol * File Photo

HELENA -- In testimony Tuesday before the Legislature’s Revenue and Transportation Interim Committee Tuesday, the state's Revenue Director Mike Kadas told lawmakers same-sex couples legally married in other states cannot file joint state income-tax returns.
Kadas said the Montana Revenue Department, (MRD) is unable to follow the recent Internal Revenue Service ruling that recognised same-couples for federal tax purpose. The IRS ruling meant that same sex-couples with a valid marriage can file a joint federal tax return.
According Kadas, the state constitutional provision that defines marriage as one between a man and a woman adopted in 2004, bars same-sex couples from legal recognition and should a same-sex couple inquires about filing a joint state income tax return the MRD will advise that it’s not a valid tax filing option.
He also told lawmakers that MRD has only had a few cases in which a taxpayer’s marriage status has been at issue, pointing out that should his agency undertook a compliance initiative effort to verify marriages, it would apply to all types of marriages — opposite sex, same sex and common law.
He acknowledged that the only possible recourse for his department would be requiring taxpayers to provide it with information that supports their claim that they have a valid marriage, in all cases by directly requesting the taxpayers to verify their marital status, which according to him would be intrusive and cost prohibitive.

“Therefore, we do not believe any compliance initiatives associated with verifying the marital validity of any type of marriage, opposite sex or same sex, is necessary,” he said adding, “We are also confident that if we did undertake a marriage compliance initiative, the cost of such an initiative would far outweigh any financial benefit received from enforcing Montana’s tax laws."

State Senator Dick Barrett, (D-Missoula) questioned Kadas as to whether or not his department anticipates it will be subject to a lawsuit under the equal protection under the U.S. Constitution, reported the Billings Gazette.
“We think that’s a distinct possibility,” Kadas responded.
Barrett then asked Kadas if he believes the department would prevail or the person challenging the agency’s position. Both Kadas and C.A. Daw, the Revenue Department’s chief legal counsel, declined to make a prediction.

“The state of Montana would allow opposite-sex couples married in Iowa to file jointly, but it would not allow a same-sex couple married in the state of Iowa to file jointly?” Barrett asked. “How would you feel about defending that practice?” 

Daw replied, “We would have to offer the defense of that case to the attorney general.”

Barrett told reporters after the hearing that he felt the sole means to repair the disparity in the tax code would be to amend Montana's Constitution and remove the 2004 amendment.