HELENA — Montana same-sex couples legally married in other states cannot file joint state income-tax return here, state Revenue Director Mike Kadas said Tuesday.
He told the Legislature’s Revenue and Transportation Interim Committee that the Internal Revenue Service issued a ruling recently that recognized same-couples for federal tax purpose. That means that same sex-couples with a valid marriage can file a joint federal tax return.
Kadas said the Montana Revenue Department cannot follow this federal guidance because of the state constitutional provision that defines marriage as one between a man and a woman. Voters here adopted this constitutional initiative in 2004 by a 2-to-1 margin.
If a same-sex couple inquires about filing a joint state income tax return, Kadas said the department will advise that it’s not a valid tax filing option.
Anyone who believes the Revenue Department is wrong can take a legal action to challenge that stance.
He told the committee the department has had few cases in which a taxpayer’s marriage status has been at issue.
“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.
Kadas said if the agency undertook a compliance initiative effort to verify marriages, it would apply to all types of marriages — opposite sex, same sex and common law. That would require the department to ask taxpayers to provide it with information that supports their claim that they have a valid marriage, he said.
Unfortunately, the department has no other means to verify taxpayers’ marital status other than directly asking them, Kadas said. That is something that at least some taxpayers would find to be intrusive, he said.
“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,” he said.
Sen. Dick Barrett, D-Missoula, asked Kadas if the department anticipates it will be subject to a lawsuit under the equal protection under the U.S.Constituition.
“We think that’s a distinct possibility,” Kadas said.
Barrett 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 said later it appears to him the only way to fix this disparity is to amend the Montana Constitution to remove the 2004 amendment.