The Maryland Senate gave preliminary approval yesterday to a bill that would allow domestic partners the same right as married couples to avoid paying taxes when adding each other to home property deeds to create joint ownership.
But a key Senate leader said yesterday that another tax bill to exempt domestic partners from inheritance taxes might not get a vote this year. The two tax bills and a third measure, which would grant domestic partners the right to medical decision-making and hospital visitations, passed by the Senate this week, have been sought by gay rights activists.
Attention has shifted to the three bills in the final weeks of the session because it appears unlikely that broader legislation dealing with civil unions or same-sex marriage will be enacted this year.
Meanwhile, the tax bills have been caught in the debate over Maryland's budget difficulties, as some lawmakers say the state cannot afford to extend the tax breaks. The real estate transfer taxes accrue to local governments, while the inheritance taxes go to the state.
Sen. Ulysses Currie, chairman of the Budget and Taxation Committee and a Prince George's County Democrat, said the inheritance tax would be a harder sell because it affects the state's budget, which has been strained by deficits and a waning economy.
But proponents said the fiscal impact of both bills would be negligible while providing gay and lesbian couples a benefit they have been denied because of their sexual orientation. Department of Legislative Services officials said no reliable estimates of the cost is available.
"People meet, fall in love, and form a committed relationship, and they want to protect each other by making sure their property is in both names," said Dan Furmansky of Equality Maryland, a leading gay rights organization. "They are charged a penalty for doing that."
The Senate, which amended the bill on real estate transfer taxes to exclude commercial property, is expected to take a final vote next week. The House of Delegates has not voted on a companion bill.
Opponents argued that the bill, which would apply to gay and straight couples that sign affidavits and can provide proof of their relationship, would create a tax-avoidance technique and undermine traditional marriage.
"Do you really want to encourage people to shack up and not commit to each other?" Sen. Alex X. Mooney, a Frederick County Republican, asked his colleagues. "This whole bill is a loophole."
laura.smitherman@baltsun.com