Walz v. Tax Commission of City of New York
(1970)
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Rule of Law:
A state law granting property tax exemptions to religious organizations for properties used exclusively for religious purposes does not violate the Establishment Clause of the First Amendment, as it constitutes a form of benevolent neutrality that avoids excessive government entanglement with religion.
Facts:
- Frederick Walz, the owner of real estate in Richmond County, New York, was subject to property taxes.
- The New York Constitution and state statutes provided property tax exemptions for a broad class of nonprofit corporations, including religious organizations for property used exclusively for religious purposes.
- The New York City Tax Commission granted such exemptions to various religious organizations in the city.
- Walz contended that these exemptions increased his personal property tax burden.
- Walz argued this effect indirectly forced him to make financial contributions to the exempted religious institutions.
Procedural Posture:
- Frederick Walz sued the New York City Tax Commission in a New York state court of first instance, seeking an injunction against granting tax exemptions to religious organizations.
- The trial court granted the Tax Commission's motion for summary judgment, dismissing Walz's complaint.
- Walz, as appellant, appealed to the Appellate Division of the New York Supreme Court, an intermediate appellate court, which affirmed the trial court's decision.
- Walz, as appellant, then appealed to the New York Court of Appeals, the state's highest court, which also affirmed.
- The United States Supreme Court noted probable jurisdiction to hear Walz's appeal.
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Issue:
Does a New York law granting property tax exemptions to religious organizations for properties used exclusively for religious worship violate the Establishment Clause of the First Amendment?
Opinions:
Majority - Chief Justice Burger
No, the New York law does not violate the Establishment Clause. A property tax exemption for religious organizations is a constitutionally permissible accommodation that avoids excessive government entanglement. The legislative purpose is not to establish religion but to recognize the beneficial and stabilizing influence of various private, non-profit groups, of which churches are just one category. The core test is whether the law's purpose or primary effect is to advance religion, and whether it fosters an excessive government entanglement with religion. Here, taxing churches would create far more entanglement than exempting them, as taxation would involve valuation, tax liens, and foreclosures, leading to direct confrontations. An exemption is not a direct subsidy but rather a government decision to abstain from demanding financial support, which reinforces the separation of church and state. The unbroken, two-century history of such exemptions in all 50 states demonstrates their accepted constitutionality and that they do not lead to an established church.
Concurring - Justice Brennan
No, the law does not violate the Establishment Clause. The longstanding historical acceptance of religious tax exemptions, dating from the nation's founding, is of considerable importance. The exemptions serve two basic secular purposes: 1) they recognize that nonprofit organizations, including churches, provide public welfare services that lessen the burden on government, and 2) they promote societal pluralism by fostering a diversity of private groups. Tax exemptions are qualitatively different from direct subsidies; they are a passive form of assistance that involves no transfer of public funds and thus avoids the symbolism of state support for religion. Terminating exemptions would paradoxically increase, not decrease, the level of church-state entanglement by necessitating government intrusion into church finances and operations for tax assessment and collection.
Concurring - Justice Harlan
No, the law does not violate the Establishment Clause. The legislation satisfies the core constitutional requirements of neutrality and voluntarism. It is neutral because the exemption applies to a very broad class of organizations dedicated to moral and cultural improvement, not just religious groups. It is voluntary because it does not use state power to encourage participation in religious life. While exemptions are economically similar to subsidies, they are different in kind; they are a traditional institution that avoids the political controversy of periodic subsidy appropriations and entails less administrative entanglement. The key policy is to prevent the kind of government involvement that leads to political fragmentation along religious lines, and this broad, neutral exemption avoids that danger.
Dissenting - Justice Douglas
Yes, the New York law violates the Establishment Clause. A tax exemption is functionally equivalent to a direct financial subsidy from the government. The subsidy here is for the church as a place of worship, which is an essentially religious activity that the government is forbidden from financing. This law aids all religions against non-believers, which the Court held unconstitutional in Torcaso v. Watkins. The long history of exemptions is irrelevant because the Establishment Clause was not applied to the states until 1947. Quoting James Madison's 'Memorial and Remonstrance,' any state support for religion, even 'three pence,' is a violation of religious freedom. This exemption is a step down a slippery slope that will inevitably lead to the church being on the public payroll, fundamentally breaching the wall of separation between church and state.
Analysis:
Walz v. Tax Commission is a landmark Establishment Clause case that formally introduced the 'excessive government entanglement' prong into the Court's analysis, a concept later solidified in Lemon v. Kurtzman. The decision established that not all benefits to religion are unconstitutional, drawing a critical distinction between a permissible, passive 'benevolent neutrality' (like a tax exemption within a broad secular class) and an impermissible, active sponsorship (like a direct subsidy). By arguing that taxation would entangle the state more with religion than exemption would, the Court created a durable framework for upholding indirect aid to religious institutions. This reasoning has been central to subsequent cases involving government aid to religious schools and charities.
