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?
