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Same-Sex Couples Get Tax Exemption, AK Judge Rules

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By Cynthia Hsu, Esq. on September 22, 2011 6:44 AM

Alaska's same-sex couples will now be enjoying some additional tax privileges. An Anchorage judge ruled last Friday that same-sex couples will now qualify for tax exemptions traditionally reserved for married spouses.

At issue is a property tax exemption that requires local governments to give seniors and disabled veterans a $150,000 exemption on their primary residence.

Same-sex couples that qualified for the property tax exemption ran into problems with the law. Married couples get the full amount of the exemption even if only one spouse qualifies and the other owns the home.

However, same-sex couples were usually only regarded as "owning" half of the home they reside in with their partner.

Alaskan Julie Schmidt, for instance, was eligible for the tax exemption. She lived in a home valued at $254,000 with her partner, Gayle Schuh, who wasn't eligible. Schmidt was only able to deduct her exemption from her "half" of the home, which was calculated to be $127,100. In other words, she was unable to deduct the full amount of the exemption, according to The Anchorage Daily News.

Same-sex couples in Alaska were excluded from certain marriage-specific benefits because voters passed an amendment in 1998 that defined marriage as between a man and a woman.

Judge Frank Pfiffner ruled that this marriage classification was against the Alaska Constitution's equal protection clause. As such, same-sex couples will now be able to apply the tax exemption just like married couples already do, reports The Anchorage Daily News. This means that qualifying individuals like Schmidt will be able to deduct the full amount of the property tax exemption.

However, this recent win for Alaska's same-sex couples may be short-lived. The state is currently reviewing its options and may decide to file an appeal. But at least temporarily, same-sex couples' tax exemptions can be deducted fully.

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