Walz v. Tax Commission of the City of New York (1970)

In what at the time was considered a case of uncertain outcome and controversy, the Supreme Court upheld New York City’s exemption from taxation of church-owned real property used to further the religious purposes and practices of churches. The Court rejected the argument that by extending tax exemption to churches it was supporting religious establishment in violation of the Free Exercise Clause.

The Court noted that a contrary argument could be made that if government taxed churches, it would cause such a degree of entanglement between church and state as itself to violate the Religion Clauses, perhaps in a more fundamental manner. The Court relied on the history of tax exemption for churches going back to colonial experience, a point particularly emphasized by Justice Brennan in his influential concurring opinion:

“The more longstanding and widely accepted a practice, the greater its impact upon constitutional interpretation. History is particularly compelling in the present case because of the undeviating acceptance given religious tax exemptions from our earliest days as a Nation. Rarely if ever has this Court considered the constitutionality of a practice for which the historical support is so overwhelming.”

The Court’s opinion also strongly noted that the church tax exemption was not restricted to churches, but was part of a broad scheme of exemption that government extended to charitable organizations:

“It has granted exemption to all houses of religious worship within a broad class of property owned by nonprofit, quasi-public corporations which include hospitals, libraries, playgrounds, scientific, professional, historical, and patriotic groups. The State has an affirmative policy that considers these groups as beneficial and stabilizing influences in community life and finds this classification useful, desirable, and in the public interest.”

While recognizing the demands of the Religion Clauses, the Court held that “there is room for a benevolent neutrality permitting religious exercise to exist without sponsorship and without interference.”

The importance of the Walz opinion to churches and religious freedom can hardly be exaggerated. The case ranks as one of the most important on such issues for two reasons. First is the result: By allowing churches and religious organizations the same immunity from taxation as other institutions of public value, the decision did much to ensure the economic security of religious institutions and to protect them from potentially onerous tax burdens. Second is the reasoning: The Court recognized that tax exemption provided a secular benefit to churches, but held that the Establishment Clause permits accommodation of such laws to further the purposes of the Free Exercise Clause. The Court thus acknowledged that, if they are strictly interpreted, the two Religion Clauses might appear to conflict in certain situations, and that such conflicts can be resolved by accommodating the free exercise interests in many if not most cases.