BILL ANALYSIS
SENATE REVENUE & TAXATION COMMITTEE
Senator Gilbert Cedillo, Chair
AB 205 - Goldberg
Amended: As Proposed To Be Amended
Hearing: July 9, 2003 Fiscal: Yes
SUBJECT: Changes the tax filing allowances for domestic
partners.
EXISTING LAW
Existing federal and state tax laws provide guidelines for
determining a taxpayer's filing status when filing an
income tax return. For example, federal law states a
husband and wife can file a joint income tax return even
though one of the spouses has no gross income or
deductions, except in certain cases.
Generally, under state law an individual must use the same
filing status for their California income tax return that
was used on their federal income tax return filed for the
same taxable year.
Under federal and state income tax law, spouses who file a
joint tax return are each responsible for the accuracy of
the return and for the full tax liability for that tax
year. These obligations apply regardless of which spouse
earns the income. The concept of obligating each spouse
separately for all of the tax liability reflected on the
joint return is called joint and several liability. Under
certain circumstances individuals who file joint returns
may be eligible for relief from joint and several
liability.
Existing state and federal laws provide various tax credits
designed to provide tax relief for taxpayers who incur
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certain expenses (e.g., child adoption) or to influence
behavior, including business practices and decisions.
The terms taxpayer, individual, person, husband, and wife,
and the determination of marital status are defined within
the state income tax law. In addition, the term domestic
partner is defined by reference to Family Code Section 297,
which states that California recognizes a domestic
partnership as being established when specified
requirements are met.
State tax law provides that the taxpayer's domestic partner
be treated as the spouse of the taxpayer for purposes of
determining various tax benefits relating to medical
expenses, such as:
medical expenses deductible as an itemized
deduction,
medical expenses deductible as an adjustment to
gross income for self-employed individual health
insurance,
an exclusion from gross income for
employer-provided accident and health insurance,
an exclusion from gross income for medical expense
reimbursement if the expense was not previously
deducted, and
long-term health care insurance deductible as a
medical expense.
State law, under the Family Code, defines marriage as a
personal relation that arises out of a civil contract
between a man and a woman. All real or personal property,
wherever situated, that is acquired by a married person
during the marriage while living in California is
considered community property.
THIS BILL
This bill would allow domestic partners to file personal
income tax returns as either 1) married filing joint, or 2)
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married filing separate.
In addition, this bill would make changes to various
California laws regarding domestic partners, including the
creation of community property rights. This subject matter
was discussed in the Senate Judiciary Committee and is not
addressed in this analysis-this analysis is limited to the
tax implications.
FISCAL EFFECT:
According to the FTB:
------------------------------------------------------------
| Revenue Impact |
| |
| Beginning on or After January 1, 2005 |
| |
| ($ Millions) |
| |
------------------------------------------------------------
|-------------+---------------+--------------+---------------|
| Fiscal Year | 2004-05 | 2005-06 | 2006-07 |
| | | | |
|-------------+---------------+--------------+---------------|
|Revenue Loss | -1.0 | -5.0 |-7.5 |
| | | | |
------------------------------------------------------------
Note: It is assumed for the second full fiscal year
(2006-07) that there would be a significant increase in
impact due to the incentive effect of potentially large tax
savings for those households not currently registered.
This analysis does not consider the possible changes in
employment, personal income, or gross state product that
could result from this measure.
COMMENTS:
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A. Author's Amendments
The author plans to take technical amendments suggested by
FTB to clarify specific tax related terms and to clarify
that domestic partners cannot file income taxes as "head of
household."
B. Purpose of the bill
The author notes the following purposes of the bill:
This bill will provide more equity to registered domestic
partners. It does not provide complete equality because
heterosexual couples are institutionally and legally
recognized by marriage while gay and lesbian couples are
not and will not under this bill. Registered domestic
partners are currently afforded approximately fifteen
rights under law, while married couples are provided
hundreds of rights and responsibilities.
This bill will expand rights, responsibilities, duties and
obligations to registered domestic partners and their
families. While marriage is the only way we will provide
full equality, Proposition 22 prohibits us from pursuing a
marriage bill at this time. There is no reason not to
expand the number of rights and responsibilities. These
legal protections and responsibilities guide couples
through nearly every complex legal situation faced by
families, such as death, custody disputes, illness,
childbirth and adoption. These laws regulate such diverse
areas as:
? Financial support during and after the relationship,
and community property ownership protections
? Protection from threats and crimes against the families
of public officials
? Child custody, visitation, and duties of financial
support of children
? Anatomical gifts, consent to autopsy and disposition of
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remains, and burial in family cemeteries
? Bereavement leave, family care and medical leave,
coverage of partners under medical, dental, life, and
disability insurance, pension rights, and death benefits
for surviving partners of firefighters and police
officers
? Mutual responsibility for debts to third parties
? Obligations to make disclosures regarding family
relationships and to take other steps to avoid nepotism,
conflicts of interest and self-dealing
? Housing protections, including access to family student
housing, senior citizen housing, and rent control
protections
? Government-regulated benefits, including workers
compensation, public assistance, transfer of licenses
upon death, and the ability to apply for absentee
ballots for a partner
? Communication privileges, including the right not to be
forced to testify against a partner
? Legal claims dependent upon family status, including
claims for victim's compensation
There is simply no good reason to deny additional rights
and duties. Granting these rights and responsibilities will
further the State's interest in promoting stable and
lasting family relationships, and will protect family
members from the economic and social consequences of
abandonment, separation, the death of loved ones, and other
life crises. It will also protect couples, the children
they are raising, third parties, and the State from
numerous harms and costs.
B. Proposition 22: California's Defense of Marriage Act
(DOMA)
In 2000, California joined a number of other states in
enacting a "mini-DOMA" when voters passed Proposition 22,
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the California Defense of Marriage Act. Proposition 22
stated "Only marriage between a man and a woman is valid or
recognized in California." Passage of the initiative means
that if a same-sex couple, legally married in another
state, moves to California, their valid marriage will not
be recognized in California. Opponents to this measure
note that it violates Proposition 22 and state that "AB 205
is an in-your-face bill, letting the voters know that
politicians do not value the input of constituents." The
opponents of the measure further note that tax filing
privileges should specifically be provided to married
couples made up of a man and woman only. The Committee on
Moral Concerns argues that "California voters decided
against gay and lesbian marriages [and therefore]
equalizing domestic partnerships violates the will of the
people." On this same point, the Campaign for California
Families states that the "people of California have spoken
loud and clear that they want marriage protected. In March
2000, more than 61 percent of the voters voted to protect
marriage rights for only a man and a woman." The
California Catholic Conference states that this bill "is a
veiled attempt to change the definition of marriage in our
state."
Support and Opposition
Support:
AIDS Legal Referral Panel
AIDS Project Los Angeles
Alianza Network Services (Tustin)
All Saints Church, Pasadena
American Association of University Women
American Civil Liberties Union
American Federation of State, County, and Municipal
Employees
Anti-Defamation League
Asian Law Caucus
Attorney General Bill Lockyer
Bay Area Lawyers for Individual Freedom
Being Alive Los Angeles, Inc.
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Billy DeFrank LGBT Community Center (San Jose)
California Capital Political Action Committee (Sacramento)
California Commission on the Status of Women
California Conference of Local AIDS Directors
California Faculty Association
California Independent Public Employees Legislative Council
California Labor Federation, AFL-CIO
California National Organization for Women
California Nurses Association
California School Employees Association
California State Employees Association
California State Teachers' Retirement System
California STD Controllers Association
California Teachers Association
California Women's Agenda
CalPERS (support if amended)
Central American Resource Center
Chinese for Affirmative Action
City and County of San Francisco
City Council Member Dave Jones (Sacramento)
City Council Member Jeffrey Prang (West Hollywood)
City of Los Angeles
City of West Hollywood
Claremont United Church of Christ, Congregational
Coalition California Welfare Rights Organizations, Inc.
Coalition LA
Conference of Delegates of California Bar Associations
Congregational Church of Belmont
Congregation Kol Ami (West Hollywood)
Congregation Sha'ar Zahav (San Francisco)
Consumer Attorneys of California
Eleanor Roosevelt Democratic Club of Orange County
Elections Committee of the County of Orange
Equality California
Equal Rights Advocates (San Francisco)
Family Builders by Adoption
First Congregational Church, UCC (Pasadena)
First Congregational Church of Long Beach
First Congregational United Church of Christ (San
Bernardino)
First Presbyterian Church (Baldwin Park)
First Presbyterian Church (Palo Alto)
Gay & Lesbian Community Services Center of Orange County
Gray Panthers
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Holy Redeemer Lutheran Church (San Jose)
Human Rights Campaign
Human Rights Watch
Human Rights/Fair Housing Commission (Sacramento)
Irvine United Congregational Church
Japanese American Citizens League
La Mesa Community Church (Santa Barbara)
Lambda Legal Defense and Education Fund, Inc.
Lawyers' Committee for Civil Rights of the SF Bay Area
Legal Aid Society - Employment Law Center
Legal Services for Children, Inc.
Lieutenant Governor Cruz Bustamante
Little Brown Church of Sunol
Los Angeles Gay & Lesbian Center
Love Sees No Borders (Sunnyvale)
Lutheran Church of the Master (West Los Angeles)
Metropolitan Community Church Los Angeles
Metropolitan Community Church in the Valley (North
Hollywood)
Metropolitan Community Church of the Coachella Valley
Metropolitan Community Church of San Francisco
Mexican American Legal Defense and Educational Fund
Mira Vista United Church of Christ (El Cerrito)
National Association of Social Workers
National Conference for Community and Justice (Santa
Barbara)
National Conference for Lesbian Rights
National Gay and Lesbian Task Force
National Latina/Lesbian, Gay, Bisexual & Transgender
Organization
National Organization for Women (San Fernando Valley -
Northeast LA Chapter)
Niles Congregational Church
Northminster Presbyterian Church of El Cerrito
Older Women's League of California
Our Family Coalition (San Francisco)
Out & Equal Workplace Advocates
Pacific Pride Foundation
Parkside Community Church (Sacramento)
People for the American Way
Pioneer Congregational Church (Sacramento)
PFLAG-San Francisco
PFLAG-San Jose/Peninsula Chapter
PFLAG-Ventura County
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Planned Parenthood Affiliates of California
Redwoods Presbyterian Church (Larkspur)
San Diego Democratic Club
San Francisco City Attorney Dennis Herrera
Santa Barbara County Democratic Central Committee
Secretary of State Kevin Shelley
Southern CA HIV Advocacy Coalition
Southern CA Nevada Conference United Church of Christ
St. Paul Lutheran Church (Oakland)
Stonewall Democratic Club of Los Angeles
Stonewall Democratic Club of Greater Sacramento
Tenderloin Housing Clinic (San Francisco)
The Center of San Diego County
The Lambda Letters Project
The Sexual Orientation Bias Committee of the LA County Bar
Association
The Tom Homann Law Association (San Diego)
Transgender Law Center
Trinity Lutheran Church (Alameda)
United Church of Christ, San Francisco
University Lutheran Chapel (Berkeley)
Wesley United Methodist Church (Fresno)
West Hollywood Democratic Club
West Hollywood Presbyterian Church
Zuna Institute
900 Individuals
Oppose:
California Catholic Conference
California Federation of Republican Women
Campaign for California Families
Committee on Moral Concerns
Eagle Forum of California
1 Individual
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Consultant: Gayle Miller
07/07/:3 16:44