Announcement from Virginia Department of Taxation will hurt married gay and lesbian couples and businesses in Virginia

FOR IMMEDIATE RELEASE - November 13, 2013 Contact: Kirsten Bokenkamp, [email protected];  804.643.4816 Richmond – The Virginia Department of Taxation on Friday issued a bulletin that will harm married gay and lesbian couples and will hurt businesses in Virginia. The bulletin informed Virginians that married gay and lesbian couples are required to file their Virginia income tax returns as single individuals.  For certain taxpayers, the required changes will impact not only their filing status but also the associated deductions, exemptions, and tax credits.  The bulletin provides that it is based on the advice of legal counsel, but fails to provide any support for its contention that Virginia’s marriage law required that the Commonwealth must “deconform” with the federal income tax code for the sole purpose of taxing same-sex couples. Putting punitive pressure on businesses, the bulletin announced that since Virginia does not recognize the legal marriages of gay and lesbian couples, under the new policy, businesses that claim a federal deduction for payments of fringe benefits to employees’ same-sex spouses and dependents must adjust the deductions they claim for Virginia income tax purposes accordingly. “This policy will hurt a lot of Virginia’s families and businesses and will bode poorly for the commonwealth as a whole,” said James Parrish, executive director of Equality Virginia.  “Businesses will have even less incentive to stay in or move to Virginia, and many households will have less money to spend in their communities.” Most states that have not yet obtained the freedom to marry have directed married gay and lesbian couples to recalculate their federal tax return as “single” or “head of household.”  Virginia’s new tax policy goes far beyond that by attempting to identify specific changes in income as reported for federal purposes, that must be changed when filing state taxes and attempting to tax businesses for providing group health benefits to the families of their employees.  Equality Virginia knows of no other state that has attempted to tax its businesses to discourage them from providing spousal benefits to the same-sex spouses of their employees. “As the Virginia tax code specifically provided that Virginia income is based on a taxpayer’s federal adjusted gross income, it is questionable that the Virginia Department of Taxation has the authority to implement such a policy without the state legislature making changes to the tax code, and we will continue to work with our legal counsel to monitor the situation,” said Parrish. The Department of Taxation will release additional guidelines prior to the 2014 filing season.


Equality Virginia is a statewide, non-partisan education, outreach, and advocacy organization seeking equality for lesbian, gay, bisexual and transgender Virginians.  Since 1989, EV has worked to end discrimination, protect families and build safe communities.  More information is online at  Connect on or Twitter @EqualityVA.