Domestic Partners Gain Tax Benefit

SACRAMENTO —  The state tax board voted Wednesday to treat domestic partners like married couples and not reassess property value when one partner dies.

Gay and lesbian rights advocates hailed the Board of Equalization vote as a step toward greater equality. But others warned that the decision oversteps the board’s authority and faces a likely court challenge.

With three Democrats voting for it and two Republicans opposed, the board adopted a rule to exempt domestic partners from a reassessment of property when one partner dies. Married couples now enjoy that exemption, without which a surviving spouse could face a sharp jump in property taxes.

“I think this is a step toward parity and equity, inch by inch,” said board Chairwoman Carole Migden.

Daniel Roth, a member of the Stonewall Democratic Club of Greater Sacramento, thanked Migden, board member John Chiang and state Controller Steve Westly for supporting the rule.

The Democrats “have really shown leadership that regardless of whether you’re gay or straight,” Roth said, “you should be treated equally under the law.”

The rule could go into effect as early as this fall. It applies only to the more than 19,000 couples who have registered as domestic partners in California.

Same-sex and heterosexual couples in which one partner is older than 62 may register with the Secretary of State for a $10 fee.

Los Angeles County Assessor Rick Auerbach predicted that the rule would have little effect on the amount of tax money governments collect.

“I’m supportive of the idea of allowing this exception for domestic partners,” he said. “I think it’s fair and equitable and appropriate.”

But the Board of Equalization overstepped its bounds, Auerbach said. Like most other county assessors in California, he said, he believes that the new rule requires a constitutional amendment because it is an exemption to Proposition 13.

That 1978 voter-approved constitutional amendment capped annual increases to the assessed value of homes at no more than 2%. It also exempted spouses from having property reassessed upon the death of their husband or wife.

“The domestic partners themselves would have more security if this were a constitutional amendment,” Auerbach said.

Republican board members Bill Leonard and Claude Parrish voted against the rule.