Policy Watch Investigates

State tax policy adds confusion, costs, and complications for NC’s same-sex couples

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Amanda Niles and Marie Baker with their son Nolan.

Marie Baker and Amanda Niles received yet another reminder this tax season that their family isn’t recognized, much less embraced, by the state of North Carolina.

When they began to consider how to file their taxes this year, the Durham couple realized that North Carolina’s ban on same-sex marriages meant the couple would be filling out six tax forms instead of the two (federal and state) tax  forms that straight married couples fill out.

That’s when the couple, who have been together since 2008, decided to hire a certified public accountant better able to navigate the complex tax environment where the women are considered married on the federal level but seen as two single women by North Carolina

“It’s three times the number of anyone else,” said Baker, a financial advisor, about the number of tax forms they filled out. “We ended up paying for taxes which we normally wouldn’t have.”

The couple had a marriage ceremony in 2011, and obtained their legal marriage status this fall in Washington, D.C., which allows same-sex marriage along with 17 other states.

North Carolina’s ban on same-sex marriages frustrates Baker, who has grown continually upset at how differently she and her wife are treated under the state’s laws.

“How does this even make sense in our country? How does this make sense in today’s world?,” Baker asked.  “Here we are treating people completely different based on who they spend their time with at night.”

Baker and Niles, who works as a physical therapist, will join other couples this afternoon at Equality North Carolina’s “Married 364: Ring Off and Renewal”,  part of an effort to bring attention to how same-sex marriages are ignored for tax purposes. The event, at 4:30 p.m. at Raleigh’s Pullen Baptist Church, will ask couples to take off their marriage rings as a form of silent protest.

Another group, the  Asheville-based Campaign for Southern Equality,  is encouraging North Carolina gay couples married in other states to file their state returns this year as married couples as part of its “Refuse to lie” campaign.

Freedom to Marry Tweet

Freedom to Marry recently tweeted the above graphic showcasing states where the federal courts have struck down marriage bans.

The courts are being looked to as the source of hope for gay rights advocates in the state, with two federal lawsuits pending that challenge North Carolina’s ban on same-sex marriages that was passed by voters in 2012. Last week, lawyers representing gay couples in the cases asked for expedited review and an injunction. Eleven other states have had federal courts strike down similar marriage restrictions or ordered that marriages performed in other states following last year’s landmark decision by the Supreme Court in U.S. v. Windsor.

In October, the N.C. Department of Revenue issued a directive (click here to read) that told North Carolina gay and lesbian couples that they would need to fill out multiple individual tax forms, instead of being able to file as married couples for both federal and state tax purposes.

That directives shows how unwelcoming the state is toward lesbian and gay couples, said Chris Brook, an attorney with the ACLU of North Carolina involved in the current litigation.

Four other states that have similar constitutional bans – Colorado, Missouri, Oregon and Utah – allowed couples married in other states to file the state portion of their taxes as married, he said.

He pointed out that states like Utah and Missouri, both of which tend to be conservative states, opted to make accommodations for same-sex couples while North Carolina did not.

“The key solution is just to recognize marriages and that would make this problem go away once and for all,” Brook said. “But North Carolina could have made this a lot easier for gay and lesbians living in the state.

For Baker and Niles, the headache that came around tax time wasn’t the biggest hurdle the couple has faced.  More significant challenges have come in ensuring that both women are recognized as the parents of their 14-month-ols son Nolan, whom Baker gave birth to. Niles, who works as a physical therapist, is pregnant with the couple’s second child.

“You have to put the pieces in place so that you can be protected,” Baker said.

The Durham couple has had conversation with friends in other states, and talked  at times about how much easier it would be to live in a state that recognized families like theirs.

But, ultimately, they want to stay and raise their family here.

“We don’t want to run from an issue,” Baker said. “We’d rather stay in the state and fight to make it the way it should be.”

Questions? Comments? Reporter Sarah Ovaska can be reached at (919) 861-1463 or sarah@ncpolicywatch.com.

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