ANNAPOLIS — Maryland Comptroller Peter Franchot and his staff are trying to work same-sex couples into the state’s tax equation without violating federal law.
The comptroller’s office began crunching numbers Thursday after Attorney General Douglas F. Gansler said state agencies must begin recognizing same-sex unions performed outside the state.
“We’re looking at how [Gansler’s opinion] could change how same-sex couples file their tax returns,” said Franchot spokesman Joseph Shapiro.
Eligibility and rates for more than 1,000 federal benefits depend on marital status, according to the Congressional Budget Office.
Shapiro said he does not know what economic effect recognizing same-sex marriages would have on Maryland. He expects the office to provide that answer within the next month, with a report on whether same-sex couples can file jointly benefits without violating federal law. If Franchot’s office finds the federal Defense of Marriage Act prevents the state from giving those benefits, lawmakers or the Court of Appeals would have to change state law.
Roughly 15,600 — or 1 percent of all coupled households — same-sex couples live in Maryland, according to the 2005 U.S. census. Baltimore is home to the highest number of same-sex couples, followed by Montgomery and Prince George’s counties.
That number could increase substantially with Maryland’s neighbor, the District of Columbia, about to validate same-sex marriages.
“You are going to find people that are married out of state — that can file here jointly — come and take advantage of our taxes,” said Stanley H. Block, a Baltimore tax lawyer.
If same-sex couples can apply for the same benefits as opposite-sex couples, Maryland’s marriage tax rate could inflate, he said.
Towson tax lawyer Jeffrey Rogyom said recognizing such unions could hurt Maryland’s tax revenues, because people formerly filing as individuals would start paying less with the marriage benefit.
But San Francisco’s chief economist told the federal government in January that recognizing same-sex couples could in fact generate revenue by bringing in more real estate, payroll and sales taxes, as well as increasing the number of insured residents.
Tax and fee revenues generated by same-sex couples are expected to increase by more than $5.4 million over the next three years in the District once same-sex weddings are legal in the city, according to the Williams Institute, an arm of the University of California at Los Angeles law school that specializes in sexual orientation legislation.
