La. Tax Exemptions For Churches Withstand Court Scrutiny

A federal appeals court refused to rule on the constitutionality of Louisiana tax exemptions for religious groups saying that the suit challenging the tax breaks belonged in state court.

The ACLU of Louisiana brought suit in 2000 against three state sales tax exemptions for religious entities. A 1996 state law exempted churches and synagogues from paying sales taxes on the purchase of Bibles and other materials for religious classes. In 1998, lawmakers enacted a tax exemption for religious groups operating camps and retreats and one for all purchases by the Catholic Church-affiliated Society of the Little Sisters of the Poor. Last year, a U.S. district judge agreed with the ACLU and invalidated the state tax exemptions. State officials appealed that ruling.

On June 11, a three-judge panel of the 5th Circuit sent the case back to the lower federal district judge with instructions to dismiss the lawsuit. The appellate court ruled in ACLU v. Bridges that the state tax exemptions must first be challenged in state court.

In 1970, the U.S. Supreme Court upheld a New York law providing a tax exemption for property used for religious, educational or charitable purposes. In Walz v. Tax Commission, Chief Justice Warren Burger, writing for the majority, concluded that the New York tax law "is neither the advancement nor the inhibition of religion; it is neither sponsorship nor hostility." According to the Walz decision, the New York tax break for religion created "only a minimal and remote involvement between church and state."

ACLU spokesman Joe Cook told the Associated Press that the group would consult its attorneys before deciding whether to challenge the tax breaks in state court.