Civil union loophole bars couples from benefits

Senior Staff Writer
Monday, October 17, 2011

Rhode Island legalized civil unions for same-sex couples in July, but lawmakers and lawyers have found that the legislation does not bestow all of the benefits of marriage. In particular, gay couples do not qualify for estate tax exemption and cannot file joint income taxes.

“The intent of the civil union bill was that all benefits and responsibilities that go along with marriage would apply to same-sex couples,” said state Rep. Frank Ferri, D-Warwick, adding that he was surprised to find this is not the case.

Following a person’s death, his or her estate is untaxed only up to $859,350, according to a Providence Journal article. Married couples have an unlimited marital deduction, meaning that the entirety of an estate can pass from one spouse to another without taxation.

“The strict reading of the civil unions bill clearly states to me that the civil union couple should get the unlimited marital deduction in Rhode Island,” said Susan Gershkoff, a local estate lawyer. “What’s the point of a civil union if you can’t get an unlimited marital deduction?”

But because state law requires the Rhode Island Division of Taxation to follow federal definitions with regards to taxes — including the definition of marriage created by the federal Defense of Marriage Act — gay couples do not qualify for the estate tax exemption or joint income tax filing.

“There’s nothing we can do on our end,” said Neil Downing, the division’s chief revenue agent, adding that it is the role of legislators and the governor to change the law. “We simply implement the provisions of any law that comes out of the General Assembly.”

The Division of Taxation’s interpretation of the law is wrong, said state Rep. Peter Petrarca, D-Lincoln, who sponsored the original civil union bill. “The only thing in the federal tax system we’re taking is the number we start with,” he said, referring to the federal adjusted gross income calculation.

Legislators expressed uncertainty about how they would move forward to remedy the situation.

The confusion arising from the civil unions legislation reflects the need for full marriage equality, said Ray Sullivan, campaign director for Marriage Equality Rhode Island.

“There are approximately 400 rights, benefits, associations, obligations associated with the word ‘marriage,'” he said. “We see this as another issue of, if not social, economic discrimination.”

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