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Friday, April 5, 2019

Income Tax Exemption for Housing Subsidies to Ministers Does Not Violate Constitution

Under the Establishment Clause of the First Amendment, “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof..”  A nonprofit organization brought suit against the United States Treasury claiming a longstanding tax code exemption for religious housing violated the Establishment Clause because it did not have a secular purpose and instead provided aid to a group of religious persons. Recently, a federal court rejected the nonprofit’s claim because the law applied equally to nonsecular institutions, did not involve a subsidy, required a level of fact-finding that did not excessively entangle the government in religion, and was a historic practice. Gaylor v. Mnuchin

The U.S. Court incorporates a number of tests when evaluating the constitutionality of Establishment Clause cases. One is known as the “Lemon Test,” which provides that a law violates the Clause unless it has a secular legislative purpose, its principal or primary effect neither advances nor inhibits religion, and it does not foster an excessive government entanglement with religion. More recently, the Court has also applied a “historical significance” test to uphold laws advancing a particular religious belief if there are a sufficient number of historical examples of the law being applied without issue.

Under both tests, the Gaylor court found the income tax exemption permissible. The court noted the exemption also applied to any housing subsidy provided as a convenience to the employer not just ministers. In addition, the court cited previous judicial decisions finding tax exemptions are not the same as subsidies and therefore do not constitute an attempt to advance religion. Also, the fact-finding required to determine if a minister satisfies the exemption is no greater level of entanglement than what is necessary to implement the law. Lastly, the court noted exemptions for religious purposes have been provided by the federal government since 1802 and no previous interpretation of the exemption suggested it was imposed for a religious purpose. 

Post Authored by David Warner, Ancel Glink     


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