Texas Monthly, Inc. v. Bullock
489 U.S. 1 (1989)
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Rule of Law:
A state tax exemption that is granted exclusively to religious periodicals, and not to a broader class of non-religious publications, violates the Establishment Clause of the First Amendment because it constitutes a government subsidy that endorses religion.
Facts:
- A Texas statute provided a sales tax exemption for “[p]eriodicals that are published or distributed by a religious faith and that consist wholly of writings promulgating the teaching of the faith and books that consist wholly of writings sacred to a religious faith.”
- Between October 1984 and October 1987, Texas repealed a general exemption for magazine subscriptions, making most publications subject to sales tax.
- Texas Monthly, Inc. publishes a general interest magazine that is not a religious publication and does not exclusively promulgate the teachings of a religious faith.
- During the three-year period when the general exemption was not in effect, Texas Monthly, Inc. was required to collect and remit state sales tax on its subscription sales.
- Texas Monthly, Inc. paid $149,107.74 in sales taxes under protest during this period.
Procedural Posture:
- Texas Monthly, Inc. paid sales taxes under protest and sued the State of Texas in the District Court of Travis County, a state trial court, seeking a refund.
- The trial court found the exemption unconstitutional and ordered the state to refund the taxes paid by Texas Monthly, Inc.
- The State of Texas appealed to the Court of Appeals for the Third Supreme Judicial District of Texas, an intermediate state appellate court.
- The Court of Appeals reversed the trial court's decision, holding that the tax exemption was constitutional.
- Texas Monthly, Inc. then appealed to the Supreme Court of the United States, which granted review.
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Issue:
Does a state sales tax exemption that applies only to periodicals promulgating the teaching of a religious faith violate the Establishment Clause of the First Amendment?
Opinions:
Majority - Justice Brennan
Yes, a state sales tax exemption that applies only to periodicals promulgating the teaching of a religious faith violates the Establishment Clause. The court reasoned that a tax exemption is a form of subsidy, and when the government directs such a subsidy exclusively to religious organizations, it acts as an endorsement of religion. The Texas exemption lacks the 'sufficient breadth' required to pass constitutional muster. Unlike the property tax exemption upheld in Walz v. Tax Comm'n, which applied to a wide array of nonprofit, quasi-public corporations (hospitals, libraries, etc.), the Texas exemption is narrowly targeted at religious content. This narrow focus lacks a legitimate secular purpose that would justify including religious publications within a broader, neutral class of beneficiaries. The Court also rejected Texas's argument that the exemption was necessary to avoid violating the Free Exercise Clause, finding that a general, non-discriminatory sales tax does not impose an unconstitutional burden on religious practice. Finally, the exemption was found to create excessive government entanglement by requiring state officials to determine whether a publication's content qualifies as 'promulgating the teaching of the faith.'
Concurring - Justice White
Yes, the Texas law is unconstitutional, but on different grounds. This law should be struck down because it violates the Free Press Clause. By exempting publications based on their religious message, the law impermissibly discriminates on the basis of content. Citing Arkansas Writers' Project, Inc. v. Ragland, the opinion states that a tax scheme that favors some publications over others based on the message they carry is plainly forbidden by the First Amendment.
Concurring - Justice Blackmun
Yes, the Texas tax exemption violates the Establishment Clause. The opinion acknowledges the tension between the Free Exercise Clause (which may require exemptions for religion) and the Establishment Clause (which may prohibit them). However, by confining the tax exemption exclusively to religious publications, Texas engaged in preferential support for religious messages, which is a core violation of the Establishment Clause. Government may not favor religious belief over disbelief. While a broader exemption that included philosophical or other non-religious literature devoted to matters of conscience might be permissible, this statute is unconstitutionally narrow because it provides a statutory preference limited to the dissemination of religious ideas.
Dissenting - Justice Scalia
No, the Texas tax exemption does not violate the Establishment Clause. The exemption is a permissible 'accommodation' of religion that has a long and widespread history in state and federal law. The majority misinterprets Walz v. Tax Comm'n, which, in the dissent's view, approved an exemption for religion as religion, not merely because it was part of a broader charitable class. The dissent argues that the Court has consistently permitted special treatment for religion that is not strictly mandated by the Free Exercise Clause. A tax exemption is fundamentally different from a direct subsidy, as it simply involves the government abstaining from demanding support from a church. Invalidating the exemption will lead to greater, not lesser, government entanglement with religion through audits, tax liens, and other enforcement mechanisms.
Analysis:
This decision significantly clarified and narrowed the 'accommodation principle' under the Establishment Clause, particularly regarding tax exemptions. It established that for a financial benefit to religion to be constitutional, it must generally be part of a broad, secular scheme that benefits a wide class of non-religious entities as well. The case distinguishes between permissible general exemptions that happen to include religious groups (like the property tax in Walz) and impermissible exemptions targeted exclusively at religion. This holding makes it much more difficult for legislatures to provide religion-specific tax benefits, effectively requiring that such accommodations be structured neutrally and with a clear secular purpose.
