Jimmy Swaggart Ministries v. Board of Equalization of California (1990)
Religious Tax Exemptions: Sales Taxes
|
||
|
||
|
||
|
||
Should religious organizations and religious materials be exempt from all taxes? Most sales and other taxes tend to be "generally applicable" - that is, they are applied to all parties, regardless of what it is they are doing or selling. Some people believe, however, that even if everyone else has to pay such taxes, religions should be totally exempt because the collection of such taxes violates both the Free Exercise and the Establishment Clauses of the First Amendment.
Background Information
California law required that a sales tax of 6 percent be collected on all tangible property purchased within the state as well as a 6 percent use-tax on property purchased outside the state. There was no provision for an exemption when the property was religious in nature or sold by a religious organzation.
Over an extended period of time (1974 - 1981), Jimmy Swaggart Ministries sold a variety of religious materials during "evangelistic crusades" in California and sold similar materials by mail to California residents (included in these materials were: "Bibles, Bible study manuals, printed sermons and collections of sermons, audiocassette tapes of sermons, religious books and pamphlets, and religious music in the form of songbooks, tapes, and records").
An audit discovered that taxes were not paid on these purchases, so the State Board of Equalization informed the company that it must "register as a seller" and pay back taxes ($118,294.54, plus $65,043.55 in interest). This was done, but the company also filed an appeal asking for a refund, arguing that under the First Amendment there should be no taxation whatsoever on religious materials.
Court Decision
According to the Supreme Court in a unanimous decision, the Free Exercise Clause does not require that religious organizations and religious purchases be completely exempt from taxation. Although it is true that licensing taxes on the distributio of religious materials had been held unconstitutional in Murdock v. Pennsylvania and Follett v. McCormick, the same did not hold here. On the contrary, the Supreme Court specifically stated that a "generally applicable income or property tax" like that in this case was perfectly acceptable if also applied to the sale of religious material.
Payment of such a generally applicable tax was found not to be an undue burden on anyone's right to freely exercise their religion, it was found not to be an example of the state singling out a specific religion or religious group for discriminatory treatment, and it was not found to constitute any form of "prior restraint" against religious speech.
There is no evidence in this case that collection and payment of the tax violates appellant's sincere religious beliefs. California's nondiscriminatory Sales and Use Tax Law requires only that appellant collect the tax from its California purchasers and remit the tax money to the State. The only burden on appellant is the claimed reduction in income resulting from the presumably lower demand for appellant's wares (caused by the marginally higher price) and from the costs associated with administering the tax.
As the Court made clear ...to the extent that imposition of a generally applicable tax merely decreases the amount of money appellant has to spend on its religious activities, any such burden is not constitutionally significant. ...though we do not doubt the economic cost to appellant of complying with a generally applicable sales and use tax, such a tax is no different from other generally applicable laws and regulations - such as health and safety regulations - to which appellant must adhere.
Furthermore, it was also found that the existence of this tax did not violate the Establishment Clause of the First Amendment because such taxaton stems from a religious purpose and does not create any "excessive governmental entanglement with religion."
...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. ...Collection and payment of the tax will of course require some contact between appellant and the State, but we have held that generally applicable administrative and recordkeeping regulations may be imposed on religious organization without running afoul of the Establishment Clause.
Most significantly, the imposition of the sales and use tax without an exemption for appellant does not require the State to inquire into the religious content of the items sold or the religious motivation for selling or purchasing the items, because the materials are subject to the tax regardless of content or motive. From the State's point of view, the critical question is not whether the materials are religious, but whether there is a sale or a use, a question which involves only a secular determination.
Significance
With this decision, the Supreme Court made it clear that the "Free Exercise Clause accordingly does not require the State to grant appellant an exemption from its generally applicable sales and use tax." In other words, there is no constitutional protections for tax exemptions for religious organizations. If governments provide tax exemptions to other non-profit groups, they cannot deny the same exemptions to some groups based solely on the existence of religious affiliation. However, governments are not required to provide tax exemptions generally or special tax exemptions available only to religious organizations.
Further Information
Back To: Court Decisions on Religious Liberty (main page)
-->