Haller v. Pennsylvania (1999)

Religious Tax Exemptions: Sales Taxes on Bibles

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Although the Supreme Court has decided in the past that tax exemptions accorded to religious organizations were constitutional, that was in the context of broad tax exemptions offered generally to charitable and non-profit groups. If tax exemptions are available only to religious groups, is that constitutional or is that force citizens to support religion?

Background Information

Henry Haller, Felice Newman, and Steve Zupcic, all Pennsylvania citizens who published and purchased books, filed suit in the Commonwealth Court of Pennsylvania, seeking an injunction to prevent the Pennsylvania Department of Revenue from enforcing Pennsylvania's sales tax exemption for "the sale at retail or use of religious publications sold by religious groups and Bibles and religious articles."

The appellees argued that this special sales tax exemption violated the Establishment Clause of the United States Constitution and violated three clauses of the Pennsylvania Constitution. The Commonwealth Court ruled that the tax exemption did indeed violate the Establishment Clause of the First Amendment, relying primarily on the Supreme Court's opinion in Texas Monthly, Inc. v. Bullock. This ruling was appealed to Pennsylvania's Supreme Cour

Court Decision

The Pennsylvania Supreme Court sided with the Commonwealth Court, finding that the special sales tax exemption was a violation of the Establishment Clause. In doing so, it had to reconcile the United States Supreme Court rulings in Texas Monthly, Inc. v. Bullock, which was relied upon by the majority in the Commonwealth Court decision, and the United States Supreme Court decision in Walz v. Tax Commission of City of New York, relied upon by the dissenters in the Commonwealth Court decision.

In her decision here, Justice Newman accomplished this by focusing upon the comments by Supreme Court Justice Brennan in his Texas Montly purality decision. Specically, Brennan argued that the tax exemptions dealt with in Walz were so broad that they failed to establish, sponsor, or support religion. The very narrow tax exemptions dealt with in Texas Montly, however, accomplished just that.

...the Establishment Clause does not categorically prohibit legislation that exclusively benefits religious organizations because in some circumstances legislatively created exemptions that benefit religious organizations or religious practices have survived Establishment Clause challenges. ...However, where the exemption at issue is a tax exemption, and a religious organization benefits from that exemption, the United States Supreme Court has required that the tax exemption be sufficiently broad to encompass similar secular organizations.

Does it matter that we are dealing with exemptions from sales taxes? The Pennsylvania Supreme Court thought that a relevant matter, pointing out that sales tax exemptions are not necessary to avoid a "significant restraint on religious activity," but at the same time they do impose a "substantial burden" on non-adherents in how their tax burden is incrased. If the state government wanted to exempt publications generally from sales taxes, that would be fine - but the overall effect must be exemptions not be designed to benefit religious organizations alone.

Significance

Although this decision does not have any legal force outside of Pennsylvania, it is part of a trend across the country to eliminate narrowly tailored tax exemptions which only benefit religious organizations or particular types of religious publications. In this case, for example, Steven Zupcic became involved because he noticed that there was a tax levied on the Koran and Haggadah, but not the Bible. Why single out the religious scriptures of Christianity, but not Judaism or Islam? Moreover, why single out religion at all? As Felice Newman commented, "Who gets to decide that the Bible is sacred but a book on sexual spirituality is not?"

This decision was not welcomed by many religious groups. One Christian book store manager was quoted in the Pittsburgh Post-Gazette as saying that "Especially with the school shootings out in Colorado, we should be doing everything we can to think about religion, instead of stirring up controversy over religion." Then-governor Tom Ridge commented when the appeal to the Pennsylvania Supreme Court was filed that "It is entirely appropriate for a state to encourage religion in our communities by exempting religious publications from the sales tax... We hope the Supreme Court will agree with this common-sense proposition." In the end, however, it was exactly that proposition that the Court rejected - it is not appropriate for the government to encourage religion just as it is not appropriate for the government to discourage religion.

Further Information

Back To: Court Decisions on Religious Liberty (main page)