The Freedom From Religion Foundation has won a lawsuit filed against the parsonage allowance given to churches but not to any other non-profit organization. A federal judge ruled that the law establishing that tax break for ministers did not have a secular purpose or effect and is an impermissible subsidy for churches.
One of the obvious signs of the exemption’s illegal religious purchase is that it doesn’t even apply to all religions, only to “ministers of the gospel.” It’s a very strong ruling based largely on the precedent of Texas Monthly v Bullock, a 1989 case that challenged a Texas law exempting religious publications from the state’s sales tax. By a 6-3 vote, the Supreme Court ruled that this was an impermissible benefit to religious organizations. The same logic obviously applies to the parsonage exemption and the judge rightly ruled so.
With respect to the merits, I conclude that § 107(2) violates the establishment clause under the holding in Texas Monthly, Inc. v. Bullock because the exemption provides a benefit to religious persons and no one else, even though doing so is not necessary to alleviate a special burden on religious exercise…
In concluding that § 107(2) violates the Constitution, I acknowledge the benefit that the exemption provides to many ministers (and the churches that employ them) and the loss that may be felt if the exemption is withdrawn. Clergy Housing Allowance Clarification Act of 2002, 148 Cong. Rec. H1299-01 (Apr. 16, 2002) (statement of Congressman Jim
Ramstad) (in 2002, estimating that § 107 would relieve ministers of $2.3 billion in taxes over next five years). However, the significance of the benefit simply underscores the problem with the law, which is that it violates the well-established principle under the First Amendment that “[a]bsent the most unusual circumstances, one’s religion ought not affect one’s legal rights or duties or benefits.” Some might view a rule against preferential treatment asexhibiting hostility toward religion, but equality should never be mistaken for hostility.
It is important to remember that the establishment clause protects the religious and nonreligious alike. If a statute
imposed a tax solely against ministers (or granted an exemption to everyone except ministers) without a secular reason for doing so, that law would violate the Constitution just as § 107(2) does. Stated another way, if the government were free to grant discriminatory tax exemptions in favor of religion, then it would be free to impose discriminatory taxes against religion as well.
The IRS will almost certainly appeal this ruling, so the question is whether it will be upheld on appeal if it goes all the way to the Supreme Court. And that may be doubtful. Only two current justices were on the court in 1989 when Texas Monthly was decided, Scalia and Kennedy, and both were in dissent. Assuming they vote the same way this time, the addition of Thomas, Alito and Roberts would give them the five votes necessary to overturn this ruling. But those are only assumptions at this point. Alito and Roberts have had little opportunity to rule in cases involving church/state issues so we don’t really know where they might come down.
If the ruling stands, one can hear the howls of outrage from big money TV evangelist frauds, who don’t have to pay taxes on their multi-million mansions. You can read the full ruling here.