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Tax Exemptions and Religion

Index of Court Decisions

Should religious organizations be exempt from taxation? Should religious groups get tax exemptions not available to other organizations? What about property owned by religious groups but used for commercial purposes - should they receive the same tax exemptions as property used only for religion?

These are the sorts of questions which the Supreme Court and many lower courts have had to wrestle with because states and communities across the nation have had varying standards when it comes to how things are taxed. Religious activities normally receive tax exemptions, but whether or not those exemptions are ever justified depends a lot on just why any exemptions are ever created in the first place.


Gibbons v. District of Columbia (1886)
Should property owned by a religious organization, even if that property is used for commercial rather than religious purposes, be exempt from the same taxes as property which is used for religious purposes? According to the Supreme Court, Congress is free to set the standards for tax exemptions and refuse to grant such exemptions to commercial property owned by church.

Jones v. Opelika I (1942)
The Supreme Court upheld a statute prohibiting the selling of literature without a license because it only covered individuals engaged in an commercial activity rather than a religious ritual.

Jones v. Opelika II (1943)
The Supreme Court ruled the practice of charging a flat fee for people distributing literature was unconstitutional. The freedom of press was not to be restricted only to those who can afford to pay the licensing fee.

Douglas v. City of Jeannette (1943)
The Supreme Court refused to prevent the City of Jeannette, Pennsylvania, from threatening prosecution of Jehovah's Witnesses who were violating a law requiring the licensing of people selling books even while that law was being challenged before the Supreme Court.

Murdock v. Pennsylvania (1943)
According to the Supreme Court, a Jeanette ordinance requiring solicitors to purchase a license from the borough was an unconstitutional tax on the Jehovah's Witnesses' right to freely exercise their religion.

Follett v. Town of McCormick (1944)
Should people who earn their living by selling or distributing religious materials be required to pay the same licensing fees and taxes as are expected of those who sell or distribute non-religious materials? The Supreme Court held that such licenses are unconstitutional.

First Unitarian Church of Los Angeles v. County of Los Angeles (1958)
Can religious tax exemptions be conditioned on a oath of adherence to some particular political ideas? According to the Supreme Court, it is impermissible to deny tax exemptions to organizations which refuse to participate in certain kinds of speech.

Walz v. Tax Commission of the City of NY (1970)
With the majority opinion written by Chief Justice Burger, the Supreme Court upheld the tax exemption for churches by a vote of 8-1.

Coit v. Green (1971)
Should private schools that engage in racial discrimination be permitted to retain their tax exempt status? This depends upon just why tax deductions exist. If private schools receive their tax deduction simply because they are involved with education, then their discriminatory policies shouldn't matter.

United States v. Christian Echoes National Ministry (1972)
How far can the IRS go in determining whether a religious organization should retain its tax exempt status? The Supreme Court let stand a District Court decision which found that the IRS did not have the authority to total up various "religious" and "political" activities in order to determine which carried more weight for an organization.

Diffenderfer v. Central Baptist Church (1972)
Should a church continue to receive a tax exemption for property that it is using for commercial purposes? Traditionally religious tax exemptions are conditioned on the idea that the church or organization pursue religious goals - commercial goals which result in a profit do not receive tax exemption.

United States v. Lee (1982)
When there is a conflict between a person's sincerely held religious beliefs and an important government program, which side should prevail? In this case, how should the courts choose between an Amish man's belief that paying Social Security taxes would entail denying his religion and the government's need for broad participation in the tax program?

Bob Jones University v. United States (1983)
The Supreme Court upheld the IRS's policy of prohibiting tax exempt status to even religious schools with racially discriminatory policies.

Texas Monthly, Inc. v. Bullock (1989)
With Justice Brennan writing the majority opinion, the Supreme Court decided that exempting religious publications from the state sales tax violated the Establishment Clause when that tax exemptions was available only for religious publications but no other.

Hernandez v. Commissioner Internal Revenue Service (1989)
If a person pays a religious or other non-profit group for services rendered, do those payments count as a charitable contribution that can be deducted from taxes?

Jimmy Swaggart Ministries v. California (1990)
Should religious organizations be totally exempt from taxation because the collection of such taxes violates both the Free Exercise and the Establishment Clauses of the First Amendment?

Davis v. United States (1990)
Taking tax deductions for charitable contributions to non-profit organizations are common - but just how far can such deductions extend? Can they be claimed for absolutely any funds that allegedly benefit a charitable organization in some fashion?

Haller v. Pennsylvania (1999)
If tax exemptions are available only to religious groups, is that constitutional or is that force citizens to support religion? The Pennsylvania Supreme Court ruled that tax exemptions offered only to certain types of religious literature and not to other types of religious literature or any non-religious literature was unconstitutional.

Branch Ministries v. Rossotti (2000)
Is the prohibition against churches participating in political campaigns a violation of their free speech and free exercise of religion? Not according to the Washington, D.C. Circuit Court of Appeals, which ruled that the IRS was justified in revoking the tax-exempt status of a Binghamton, New York church after it ran ads attacking Bill Clinton during the 1992 presidential campaign.

Indianapolis Baptist Temple v. U.S (2000)
If a religious group believes that paying taxes is a sin, should they become exempt from paying all taxes in order to preserve their right to free exercise of religion?

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