DOMA stands for the Defense of Marriage Act, a law of the United States that was enacted in 1996. As the name implies, this law barred the federal government from recognizing same-sex marriages as valid. This had wide-reaching implications for businesses, particularly in areas such as taxes, benefits, and rights.
Taxes
One of the most significant impacts of DOMA on businesses was in the area of taxation. For example, married couples are allowed to file joint returns, which usually lowers their tax burden. Under DOMA, businesses were prohibited from allowing same-sex couples to file joint returns. This could have led businesses to face a greater tax liability.
Benefits
Additionally, businesses were affected by DOMA in terms of benefits. Under the law, businesses were not allowed to provide health insurance to same-sex partners and may have been excluded from providing any other benefits to same-sex couples. This put them at a disadvantage when attempting to attract the best employees.
Rights
Finally, DOMA had an impact on the rights of businesses. Since the law did not recognize same-sex marriages, businesses were not allowed to provide rights, such as spousal rights, to same-sex couples. This created a completely separate class of employees and could have potential risks for businesses.
The Supreme Court Repeals DOMA
In 2013, the U.S. Supreme Court ruled that the Defense of Marriage Act was unconstitutional, thus overturning the law and allowing same-sex marriages to be recognized by the federal government. With the repeal of DOMA, businesses had to adjust their policies and procedures to accommodate same-sex couples, and many of the legal and financial implications of the law were eliminated.