The United States Supreme Court issued their decision on gay marriage earlier today.  The Court ruled on California’s Proposition 8 ban on gay marriage and the 1996 federal Defense of Marriage Act (“DOMA”), which denied federal benefits to lawfully married same-sex couples, finding that DOMA is unconstitutional and sending Proposition 8 back to California.

The ramifications of these decisions are immense.  By striking down Section 3 of DOMA, the Court has cleared the way for reconciling conflicting state laws on same-sex marriage with federal benefits and tax regulations.  In a 5-4 decision, Justice Anthony Kennedy wrote that DOMA violated gay couples right to liberty and equal protection, “[by] seeking to displace this protection and treating those persons as living in marriages less respected than others…”  From a fiscal perspective, this decision also paves the way for same-sex couples to file joint taxes and claim a spousal share of Social Security benefits, as well as avoid estate taxes related to real estate transfers (one of the issues which brought DOMA’s Constitutionality before the Court).

Worth noting is that DOMA is not entirely off the books; Section 3 of DOMA, which defined marriage, was found unconstitutional, however, Second 2 which recognized that states do not have to recognize same-sex marriages from other states remains in effect.  This aspect of the law was not subject to Constitutional challenge.  The consequence of this section remaining in effect is that it is up to the individual states to decide whether to recognize the same-sex marriage or civil unions permitted in twelve states (plus Washington, D.C.); the states do not have to grant “full faith and credit” to the same-sex marriages of another state.