{"id":30864,"date":"2022-07-20T15:23:00","date_gmt":"2022-07-20T20:23:00","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/constitution\/amendment1\/annotation03.html"},"modified":"2022-07-20T15:23:00","modified_gmt":"2022-07-20T20:23:00","slug":"annotation03","status":"publish","type":"constitution","link":"https:\/\/constitution.findlaw.com\/amendment1\/annotation03.html","title":{"rendered":"Tax Exemptions of Religious Property Under the First Amendment"},"content":{"rendered":"\n
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Tax Exemptions of Religious Property Under the First Amendment<\/h1>\n
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\n By FindLaw Staff<\/a> | Legally reviewed by Laura Temme, Esq.<\/a>\n | Last reviewed\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

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The First Amendment prohibits the U.S. government from restricting the free exercise of religion. It also cannot establish a national religion or favor one religion over another. But one interesting exception recognized by the Supreme Court is tax breaks for religious organizations. <\/p>\n\n <\/div>\n\n

Many people know that churches and other religious organizations do not pay taxes, but have you ever wondered why? After all, the First Amendment prohibits the United States government from favoring religious institutions. However, the Supreme Court found a rationale for the tax exemption, and it happened later in our history than you might think.<\/p>\r\n

What the First Amendment Says<\/h2>\r\n

"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof…"<\/p>\r\n

What It Means<\/h2>\r\n

United States Library of Congress, The Constitution of the United States of America: Analysis and Interpretation<\/i><\/b>
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Every state and the District of Columbia provide for tax exemptions for religious institutions, and the history of such exemptions goes back to the time of our establishment as a polity. The only comment by a Supreme Court Justice prior to 1970 was by Justice Brennan, who deemed tax exemptions constitutional because the benefit conferred was incidental to the religious character of the institutions concerned.1<\/sup><\/p>\r\n

Then, in 1970, a nearly unanimous Court sustained a state exemption from real or personal property taxation of property used exclusively for religious, educational or charitable purposes owned by a corporation or association which was conducted exclusively for one or more of these purposes and did not operate for profit.2<\/sup><\/p>\r\n

The first prong of a two-prong argument saw the Court adopting Justice Brennan\u2019s rationale. Using the secular purpose and effect test, Chief Justice Burger noted that the purpose of the exemption was not to single out churches for special favor; instead, the exemption applied to a broad category of associations having many common features and all dedicated to social betterment.<\/p>\r\n

Thus, churches as well as museums, hospitals, libraries, charitable organizations, professional associations, and the like, all non-profit, and all having a beneficial and stabilizing influence in community life, were to be encouraged by being treated specially in the tax laws. The primary effect of the exemptions was not to aid religion; the primary effect was secular and any assistance to religion was merely incidental.3<\/sup><\/p>\r\n

For the second prong, the Court created a new test, the entanglement test,4<\/sup> by which to judge the program. There was some entanglement whether there were exemptions or not, Chief Justice Burger continued, but with exemptions there was minimal involvement. But termination of exemptions would deeply involve government in the internal affairs of religious bodies, because evaluation of religious properties for tax purposes would be required and there would be tax liens and foreclosures and litigation concerning such matters.5<\/sup><\/p>\r\n

Although the general issue is now settled, it is to be expected that variations of the exemption upheld in Walz<\/i> will present the Court with an opportunity to elaborate the field still further.6<\/sup> For example, the Court determined that a sales tax exemption applicable only to religious publications constituted a violation of the Establishment Clause,7<\/sup> and, on the other hand, that application of a general sales and use tax provision to religious publications violates neither the establishment clause nor the free exercise clause.8<\/sup><\/p>\r\n

More on the First Amendment<\/h3>\r\n