Walz v. Tax Commission of the City of New York, 397 U.S. 664 (1970)

Many states and localities have long granted exemptions from property taxes to religious institutions. In Walz v. Tax Commission, the Court considered whether such exemptions violated the establishment clause and concluded that they did not.

In 1968, the State of New York granted property tax exemptions to a variety of groups, including literary, historical, educational, charitable, and religious organizations. In fact, all states granted some type of tax exemption to religious organizations at the time, and several had granted the exemptions for over 200 years. Frederick Walz owned property in New York City; therefore, he paid property taxes. He believed that the tax exemption for religious organizations caused him to indirectly support those religious organizations by paying a part of their share of taxes. He viewed this indirect contribution to the religious organizations as a violation of the establishment clause of the First Amendment. Walz sued but lost in the New York State courts. He appealed to the U.S. Supreme Court. Thirty-seven state attorneys general (including three future U.S. Senators), along with a number of religious organizations, submitted briefs in support of the tax exemptions. The Supreme Court held, by a vote of seven to one, that tax exemptions to churches do not violate the establishment clause of the First Amendment.

Chief Justice Burger wrote the opinion for the majority, in which he articulated the underlying principle of the First Amendment religion clauses: ‘‘[W]e will not tolerate either governmentally established religion or governmental interference with religion.’’ He reasoned that the legislative purpose of this exemption was not to advance religion or inhibit religion. Certain groups foster ‘‘moral and mental improvement’’ and ‘‘exist in a harmonious relationship to the community at large.’’ Religious groups, along with other charitable, literary, historical, and educational groups, provided a benefit to the community. Therefore, the groups were worthy of tax exemptions, as taxation would be burdensome to those groups. The tax exemptions were provided equally to each of these groups, and were not simply for the benefit of religious organizations. The tax exemptions were also neutral as applied to religious organizations. The statute did not identify specific religions or churches, but applied the exemption to all, equally. The statute had a secular legislative purpose and it neither advanced nor inhibited religion.

He also explained that the effect of such legislation did not cause ‘‘excessive entanglement’’ between religion and government. The danger of excessive entanglement between religion and government would be greater if religious organizations were subject to tax appraisals, tax liens, and tax foreclosures, than if the religious organizations were simply exempted from taxes.

Justice Brennan wrote a concurrence in which he analyzed the statute to ensure that it did not serve ‘‘religious activities,’’ ‘‘religious purposes,’’ or ‘‘use religious means to serve governmental ends.’’ He reviewed a number of examples from the nation’s early history to demonstrate that the Founding Fathers approved of tax exemptions for religious organizations both before and after the Bill of Rights was drafted and ratified. If such tax exemptions did not offend the drafters of the Constitution, then such tax exemptions did not offend the Constitution. Justice Brennan also relied, in part, on the fact that many religious organizations also perform charitable and secular functions. The majority rejected this rationale as a basis for supporting the tax exemptions.

Justice Harlan wrote his own concurrence in which he based his support for the statute on ‘‘neutrality and voluntarism.’’ Laws must not favor one religion over another, or religion over nonreligion. Laws also must not encourage or discourage participation in religion. This law satisfied both tests of neutrality and volunteerism.

Justice Douglas wrote the dissent, in which he argued that a tax exemption is no different than a subsidy. Justice Douglas distinguished houses of worship from other charitable organizations that receive tax exemptions. He reasoned that since the government could fund the charitable organizations directly, the government could provide a tax exemption to them. Since government could not provide a direct subsidy to support a house of worship, it could not provide a tax exemption to that house of worship.

This case contributed the ‘‘excessive entanglement’’ analysis to the framework that the Court would use in the future to examine any government action under the establishment clause. The following year, when the Court decided Lemon v. Kurtzman (1971), it created the Lemon test. Under the Lemon test, in order for government action to comply with the establishment clause, the action must have a secular purpose; it must neither advance nor inhibit religion; and, it must cause no excessive entanglement between government and religion. In subsequent cases, the Court held that providing sales and use tax exemptions exclusively to religious organizations that sold materials violated the establishment clause.

JAMES G. HARWOOD

References and Further Reading

  • Hamilton, Marci A., Free? Exercise, William and Mary Law Review 42 (2001): 823–861.
  • Jimmy Swaggart Ministries v. Board of Equalization of California, 493 U.S. 378 (1990).
  • McCreary County v. American Civil Liberties Union of Kentucky, 125 S.Ct. 2722 (2005).
  • Texas Monthly, Inc. v. Bullock, 489 U.S. 1 (1989).
  • Zelinsky, Edward A., Are Tax ‘‘Benefits’’ for Religious Institutions Constitutionally Dependent on Benefits for Secular Entities? Boston College Law Review 42 (2001): 805.

Cases and Statutes Cited

  • Lemon v. Kurtzman, 403 U.S. 602 (1971)

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