RUCKSAPOL JIWUNGKUL, ETC. VS. DIRECTOR, DIVISION OF TAXATION (TAX COURT OF NEW JERSEY)

161 A.3d 767, 450 N.J. Super. 257

• Court: New Jersey Superior Court Appellate Division
• Decided: May 30, 2017
• Docket: A-4089-15T2
• Status: Published

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-4089-15T2

RUCKSAPOL JIWUNGKUL, AS EXECUTOR OF THE ESTATE OF MAURICE R. CONNOLLY, JR., APPROVED FOR PUBLICATION

May 30, 2017 Plaintiff-Appellant, APPELLATE DIVISION v.

DIRECTOR, DIVISION OF TAXATION,

Defendant-Respondent.

_______________________________________

Argued May 9, 2017 – Decided May 30, 2017

Before Judges Messano, Espinosa and Grall.

On appeal from the Tax Court of New Jersey, Docket No. 9346-2015.

Robyne D. LaGrotta argued the cause for appellant.

Heather Lynn Anderson, Deputy Attorney General, argued the cause for respondent (Christopher S. Porrino, Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel; Ms. Anderson, on the brief).

The opinion of the court was delivered by

ESPINOSA, J.A.D. Plaintiff Rucksapol Jiwungkul and Maurice R. Connolly, Jr.

registered as domestic partners pursuant to the Domestic

Partnership Act (DPA), N.J.S.A. 26:8A-2(d) on July 10, 2004.

They chose not to enter into a civil union and, sadly, Connolly

died shortly before they were to marry.

Plaintiff appeals from a decision of the Tax Court that

affirmed the denial of his request for a refund of inheritance

tax paid on behalf of Connolly's estate. Plaintiff argues the

trial court erred because the DPA violates the equal protection

guarantee of the New Jersey Constitution, Art. I, Para. 1, and

there is no rational basis for the marital deduction to be

different under the New Jersey Inheritance Tax Law and the New

Jersey Estate Law. We affirm, substantially for the reasons set

forth in the cogent and comprehensive written opinion of Judge

Patrick DeAlmeida, P.J.T.C., Jiwungkul, as Executor of the

Estate of Michael R. Connolly, Jr. v. Director, Division of

Taxation, Docket No. 009346-2015 (May 11, 2016).

In enacting the DPA, the Legislature expressed its intent

"that certain rights and benefits should be made available to

individuals participating in [domestic partnerships], including:

. . . certain tax-related benefits." N.J.S.A. 26:8A-2(c). The

tax-related benefits the Legislature stated domestic partners

"should be entitled to" were identified as "an additional

2 A-4089-15T2 exemption from the personal income tax and the transfer

inheritance tax on the same basis as a spouse." N.J.S.A. 26:8A-

2(d).

In Lewis v. Harris, 188 N.J. 415 (2006), the Court stated:

To comply with the equal protection guarantee of Article I, Paragraph 1 of the New Jersey Constitution, the State must provide to committed same-sex couples, on equal terms, the full rights and benefits enjoyed by heterosexual married couples. The State can fulfill that constitutional requirement in one of two ways. It can either amend the marriage statutes to include same-sex couples or enact a parallel statutory structure by another name, in which same-sex couples would not only enjoy the rights and benefits, but also bear the burdens and obligations of civil marriage. If the State proceeds with a parallel scheme, it cannot make entry into a same-sex civil union any more difficult than it is for heterosexual couples to enter the state of marriage.

[Id. at 463.]

The legislative response was to enact the Civil Union Act,

N.J.S.A. 37:1-28 to -36, which established "civil unions" that

were "meant to guarantee the rights and benefits of marriage,

but [did] not allow same-sex partners to 'marry.'" Garden State

Equality v. Dow, 216 N.J. 314, 318 (2013) (citing N.J.S.A. 37:1-

28, -33). After establishing civil unions, the Legislature

effectively terminated the registration of new domestic

partnerships and stated the new statute "shall not alter the

3 A-4089-15T2 rights and responsibilities of domestic partnerships existing

before the effective date of this act." N.J.S.A. 26:8A-4.1.

Plaintiff filed New Jersey tax returns on behalf of

Connolly's estate that were consistent with their status as

domestic partners. He claimed the spousal exemption allowed for

domestic partners under the New Jersey Inheritance Tax, N.J.S.A.

54:34-2(a)(1), and paid $6,000 in inheritance tax. Because no

spousal deduction was permitted for domestic partners under the

New Jersey Estate Tax, N.J.S.A. 54:38-1 to -16, he did not claim

such a deduction and paid $101,040.72 in estate tax.

Approximately two months later, plaintiff filed an amended

estate tax return in which he claimed a marital deduction for

all property passing to him from Connolly and a concomitant

refund of $101,040.72. Although the marital deduction he sought

was not authorized under the DPA, it was available prior to

Connolly's death to members of a civil union. N.J.S.A. 37:1-

32(n); N.J.A.C. 18:26-3A.8(e). Plaintiff's request for a refund

was denied by the Division of Taxation with the explanation,

"Please be advised that a Domestic Partner receives the Class A

exemption for Inheritance Tax purposes however, a Domestic

Partner does not receive the Marital Deduction for Estate Tax

purposes."

4 A-4089-15T2 Plaintiff then filed a complaint in the Tax Court,

contending the denial of his request violated the DPA and the

Supreme Court's holding in Lewis, and moved for summary

judgment. The Division of Taxation cross-moved for summary

judgment. Judge DeAlmeida affirmed the denial of refund,

granting the Division's cross-motion and denying plaintiff's

motion.

In his opinion, Judge DeAlmeida identified the "central

question" as "whether the [DPA] provides that a surviving same-

sex registered domestic partner is to be treated as a surviving

spouse for purposes of calculating the New Jersey estate tax."

Jiwungkul, supra, slip op. at 1-2. He reviewed the evolution in

recognizing the rights of same-sex couples in the courts and in

legislation, the differences in the transfer inheritance tax and

the estate tax and the fact that, after passage of the DPA, the

Legislature amended four specific statutory provisions to apply

certain tax benefits – not including the estate tax -- to same-

sex registered domestic partners. Id. at 4-10, 14. Judge

DeAlmeida stated, "Only extraordinary circumstances would

warrant a court engrafting into the DPA a tax benefit not

mentioned in the statute." Id. at 18. Such circumstances would

exist when a couple was "unable to enter into a marriage or

other State-sanctioned relationship affording them a tax benefit

5 A-4089-15T2 available to married couples." Id. at 19. Judge DeAlmeida

noted that "crucial fact" was absent here. Ibid. He observed

further that in deciding Lewis, the Supreme Court identified a

remedy to satisfy the constitutional infirmity rather than hold

the DPA should be construed to afford all the rights of marriage

to registered domestic partners. Ibid. We agree with Judge

DeAlmeida that the DPA should be applied as written and that,

because same-sex couples can access all the rights and benefits

of marriage through marriage or civil unions, there is no

constitutional violation.

Affirmed.

6 A-4089-15T2