489 U.S. 1 (1989)
In 1982 Texas enacted a sales and use tax exemption for periodicals published or distributed by a religious faith and consisting wholly of writings promulgating the teaching of the faith, along with books consisting solely of writings sacred to a religious faith, under Tex. Tax Code Ann. § 151.312.1 Prior to October 2, 1984, Texas also exempted magazine subscriptions running half a year or longer and entered as second class mail.2 That general exemption was repealed effective October 2, 1984, and remained repealed until October 1, 1987.3 During the three-year interval, Texas Monthly, Inc., which publishes a monthly general interest magazine not limited to religious teachings, was required to collect and remit sales taxes on its qualifying subscription sales.4
Texas Monthly paid $149,107.74 in sales taxes under protest in 1985 and filed suit in the District Court of Travis County, Texas, seeking a refund of those payments.5 The district court ruled that the religious periodicals exemption had no basis other than the promotion of religion itself.6 The court also found that the exemption discriminated on the basis of publication content.7 It declared the tax unconstitutional as applied to nonreligious periodicals and ordered the State to refund the amount paid plus interest.8
The Court of Appeals, Third Supreme Judicial District of Texas, reversed the district court's judgment by a 2-to-1 vote.9 The Court of Appeals applied the tripartite test from Lemon v. Kurtzman.10 It concluded that the exemption served a secular purpose of preserving separation between church and state, did not have the primary effect of advancing or inhibiting religion, and did not produce impermissible government entanglement with religion.11 Therefore the Court of Appeals upheld the exemption.12
The United States Supreme Court noted probable jurisdiction to consider the constitutionality of the exemption.13
Whether a Texas statute exempting from sales and use taxes only periodicals published or distributed by a religious faith and consisting wholly of writings promulgating the teaching of that faith violates the Establishment Clause of the First Amendment?14
The Establishment Clause of the First Amendment, applicable to the states through the Fourteenth Amendment, prohibits legislation that constitutes an endorsement of religion or lacks a secular purpose, has the primary effect of advancing religion, or fosters excessive government entanglement with religion, as set forth in the tripartite test of Lemon v. Kurtzman.15
Yes. The Texas statute lacks a secular legislative purpose because its sole aim is to advance the religious beliefs of those who publish or distribute religious periodicals, with no basis in promoting the free flow of information.16 The primary effect of the statute is to advance religion.17 It confers a substantial financial benefit exclusively on religious organizations through relief from collecting and remitting sales taxes.18 Nonreligious publishers such as Texas Monthly bore that burden during the three-year period after repeal of the general magazine subscription exemption.19 The statute fosters excessive entanglement because state officials must examine the content of publications to determine whether they consist wholly of writings promulgating the teaching of a religious faith.20
Applied to the established facts, Texas Monthly paid $149,107.74 in taxes on its general interest magazine while religious periodicals remained exempt under Tex. Tax Code Ann. § 151.312, producing the precise sponsorship of religious belief the Establishment Clause forbids.21
The exemption violates the Establishment Clause.22
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Joined by The Chief Justice And Justice Kennedy
Justice Scalia dissented on the ground that the exemption represents a permissible accommodation of religion rooted in longstanding tradition and the holding of Walz v. Tax Commission.23 He argued that the Lemon test was applied too rigidly here.24 The exemption does not require excessive entanglement because administrators need only verify the publisher's religious status without detailed doctrinal review.25
Eliminating the exemption would increase rather than decrease state involvement with religion through audits and collection proceedings.26 Scalia concluded that the statute should have been upheld as consistent with the accommodation principle recognized in cases such as Zorach v. Clauson and Corporation of Presiding Bishop v. Amos.27
Whether the exemption is compelled by the Free Exercise Clause of the First Amendment?28
The Free Exercise Clause does not require the government to grant tax exemptions to religious organizations.29 In United States v. Lee, an Amish employer could be required to pay social security taxes despite his religious objections. Similarly, in Bob Jones University v. United States, the denial of tax-exempt status to a religious university that practiced racial discrimination was upheld. These cases establish that the government is not constitutionally required to grant religious exemptions from generally applicable tax laws.30
No. The Free Exercise Clause does not compel the exemption because the state produced no evidence that payment of the sales tax by subscribers to religious periodicals would offend their religious beliefs or inhibit religious activity.31 The sales tax is a generally applicable levy.32 It equals a small fraction of the value of each sale and is payable by the buyer.33 This poses no substantial burden comparable to the flat license taxes invalidated in Murdock v. Pennsylvania or Follett v. McCormick.34
Applied to the facts, Texas Monthly's payment of $149,107.74 under protest during the three-year interval demonstrates that the tax operated uniformly on nonreligious publications without any showing that religious subscribers faced a concrete burden sufficient to overcome the state's interest in uniform collection.35
The exemption is not compelled by the Free Exercise Clause.36
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Joined by Justice O'connor
Justice Blackmun concurred in the judgment.37 He emphasized that the Free Exercise Clause value suggests a state may not tax the sale of religious literature.38 The Establishment Clause value forbids giving a tax break to those who spread the gospel that it does not also give to others who advocate disbelief.39 He noted the tension between the two clauses.40
He concluded that a tax exemption limited exclusively to religious literature violates the Establishment Clause by providing preferential support for the communication of religious messages, regardless of whether Follett and Murdock ultimately require an exemption.41
Whether the exemption violates the Free Press Clause of the First Amendment?42
The Free Press Clause prohibits content-based taxation that discriminates among publications on the basis of the message they carry, as held in Arkansas Writers' Project, Inc. v. Ragland, because such taxes single out publications for disfavored or favored treatment without a compelling justification.43
Yes. The exemption discriminates on the basis of the content of publications because eligibility turns on whether the periodical consists wholly of writings promulgating the teaching of a religious faith.44 It thereby exempts some publications while taxing others such as Texas Monthly's general interest magazine solely because of the message they carry.45 Applied to the facts, the statute exempted religious periodicals under Tex.
Tax Code Ann. § 151.312 while requiring Texas Monthly to collect and remit taxes on its qualifying subscription sales during the three-year period, creating the precise content-based distinction forbidden by the Free Press Clause.46
The exemption violates the Free Press Clause.47
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Justice White concurred in the judgment on the separate ground that the Texas law discriminates on the basis of the content of publications by exempting only those that consist wholly of writings promulgating the teaching of a religious faith.48 He stated that this content-based distinction is plainly forbidden by the Press Clause and that Arkansas Writers' Project, Inc. v. Ragland is directly applicable, providing the proper basis for reversal without needing to reach the Establishment Clause analysis.49