First Amendment:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

Government decisions that refuse to grant a tax exemption may be viewed as a decision to deny financial aid. On that theory, religious entities have sometimes argued that the federal government’s decision to deny them a tax exemption for religiously motivated actions violated the Establishment Clause where the exemption allegedly preferred certain religions.1 The Supreme Court rejected the constitutional challenges in two such cases, noting that the federal government’s tax laws were generally neutral in their purpose and effect, and that the challenged policies did not facially discriminate on the basis of religion.2 In one of the cases, the Court further concluded that the decision to tax the church did not threaten an “excessive entanglement between church and state,” even though the government would have to obtain certain information from religious entities to ascertain tax liability.3 The Court described this as a “routine regulatory interaction” that did not require an impermissible inquiry “into religious doctrine” or entail “'detailed monitoring and close administrative contact’ between secular and religious bodies.” 4

Entanglement was at the core of another Supreme Court opinion rejecting an Establishment Clause challenge to a state’s decision to impose generally applicable sales and use taxes on religious publications.5 A religious organization that sold evangelical materials such as books and tapes sought an exemption from state tax liability, arguing that the state would violate Lemon's entanglement prong by taxing its materials.6 The Supreme Court rejected this argument, saying that even if the law imposed accounting burdens on the organization, “such administrative and recordkeeping burdens do not rise to a constitutionally significant level.” 7 Among other factors, the Court noted that the scheme did not require invasive surveillance or inspection of the organization’s “day-to-day operations,” and did not require the state “to inquire into the religious content of the items sold or the religious motivation for selling or purchasing the items.” 8 The Court emphasized that materials were “subject to the tax regardless of content or motive” : the state cared only “whether there is a sale or a use, a question which involves only a secular determination.” 9

In Harris v. McRae, the Court considered a statute that even more directly denied financial assistance.10 The Court rejected an Establishment Clause challenge to the Hyde Amendment, a law prohibiting federal funds from being used to fund certain abortions under the Medicaid program.11 Challengers to the Hyde Amendment argued that this funding condition unconstitutionally “incorporate[d] into law the doctrines of the Roman Catholic Church concerning the sinfulness of abortion and the time at which life commences.” 12 The Supreme Court, however, concluded that the condition did not violate Lemon, saying the fact that the restriction “may coincide with the religious tenets of the Roman Catholic Church does not, without more, contravene the Establishment Clause.” 13 In the Court’s view, the Hyde Amendment was “as much a reflection of ‘traditionalist’ values towards abortion, as it [wa]s an embodiment of the views of any particular religion.” 14

Footnotes

1

Hernandez v. Commissioner, 490 U.S. 680, 695 (1989) (arguing that by denying tax-deductible status to certain payments made to the Church of Scientology for services rendered, the federal government created “an unconstitutional denominational preference” by disfavoring religions that impose fixed costs for participating in religious practices); Bob Jones Univ. v. United States, 461 U.S. 574, 604 n.30 (1983) (arguing that a federal policy denying tax-exempt status to schools that practice racial discrimination “preferr[ed] religions whose tenets do not require racial discrimination over those which believe racial intermixing is forbidden” ).

2

Hernandez, 490 U.S. at 696; Bob Jones Univ., 461 U.S. at 604 n.30. Cf. Larson v. Valente, 456 U.S. 228, 230, 246–47 (1982) (holding that a state statute imposing “registration and reporting requirements upon only those religious organizations that solicit more than fifty per cent of their funds from nonmembers” created a denominational preference, triggering strict scrutiny). For a more detailed discussion of Larson see Amdt1.3.6.5 Lemon’s Entanglement Prong.

3

Hernandez, 490 U.S. at 696.

4

Id. at 696–97 (quoting Aguilar v. Felton, 473 U.S. 402, 414 (1985)).

5

Jimmy Swaggart Ministries v. Cal. Bd. of Equalization, 493 U.S. 378, 397 (1990).

6

Id. at 382, 392. The organization’s argument focused on Lemon's entanglement prong, but the Supreme Court also briefly considered the first two prongs of the Lemon test, ruling that “it is undeniable that a generally applicable tax has a secular purpose and neither advances nor inhibits religion, for the very essence of such a tax is that it is neutral and nondiscriminatory on questions of religious belief.” Id. at 394.

7

Id. at 394.

8

Id. at 395–96.

9

Id. at 396.

10

Harris v. McRae, 448 U.S. 297 (1980).

11

Id. at 302–03.

12

Id. at 319.

13

Id. at 319–20.

14

Id. at 319.