Rhode Island wants to keep religious books tax-exempt

Wednesday, December 16, 1998

A law in limbo in Rhode Island would save Bibles and other sacred texts from sales taxes.

Groups of booksellers and buyers have challenged the law in state court as a violation of the First Amendment's establishment clause. Last year a state district court judge ruled that the law did run afoul of the separation of church and state and barred the state from granting the exemptions.

Several years before the district judge's decision, the state tax administrator had issued a regulation that nullified the tax law. R. Gary Clark, the tax administrator, issued the regulation in 1993 after the booksellers and buyers, represented by a state civil liberties group, asked him to rule on the tax law's constitutionality. Although Clark effectively barred the tax law from taking effect, he did not rule on whether it violated the First Amendment.

The administrative regulation states: “The sale, storage and use or other consumption in this state of bibles or any other canonized scriptures is subject to tax notwithstanding” the state tax law. “Such bibles and other canonized scriptures are subject to tax in accordance with the United States Supreme Court's decision in Texas Monthly, Inc. v. Bullock.”

Lawyers with the Rhode Island attorney general's office are trying to resurrect the law, because they say it, along with other sales-tax exemptions, would help to advance and encourage moral and intellectual diversity in the state. Last week before the Rhode Island Supreme Court, Assistant State Attorney General Rebecca Partington argued that the law did not endorse one religion over another because all canonized religious texts would be exempt from sales taxes. She asked that the district judge's ruling be invalidated.

The attorney general's office argued in its brief before the state's high court that the provision was in a larger tax law that also granted tax breaks on the sales of an array of items, such as public school meals, medicines, coffins, clothing, motor vehicles purchased by paraplegics, and jewelry displays.

Partington said that the tax break on sales of religious texts fits within the theme of trying to help state residents in times of need.

“First, this tax exemption may not be necessary, but the Legislature has broad discretion on granting tax exemptions,” Partington said. “Also, this tax-break does not funnel money into a particular church, it helps out the publishers, sellers and buyers of these types of texts.”

Partington also said that the state would stand in the way of religious freedom if it taxed religious texts.

“It keeps the tax man out of the church vestibule,” she said. “If we don't have these exemptions, then the state would be faced with entanglement problems with religion. The tax administrator would have to make sure the parish bookstore is collecting a sales tax and would have to audit the church bookstore; and that would be uncomfortable and an unconstitutional situation.”

The law provides an exemption on any sales tax or use tax (such as storage) on “canonized scriptures of any tax exempt religious organization including but not limited to the old testament and new testament versions.” The state chapter of the American Civil Liberties Union, representing the groups opposed to the tax law, argued before the state's high court to leave the district judge's ruling intact.

“The sales-tax provision exempts only religious literature and only certain types — the so- called canonized scriptures,” Steve Brown, executive director of the Rhode Island ACLU, said. “We don't believe that the state, consistent with the First Amendment, can support such an exemption. It is especially inappropriate to place either the state or booksellers in the role of determining what is and what is not a canonized scripture.”

Brown also noted that in 1989 the U.S. Supreme Court invalidated a similar tax law in Texas. The district judge in Rhode Island also cited the high court's ruling in Texas Monthly, Inc. v. Bullock, in striking down the state sales-tax exemption.

“The court believes that the Supreme Court's decision in Texas Monthly, Inc., v. Bullock is controlling,” Rhode Island District Court Judge Walter Gorman wrote.

In Texas Monthly the high court ruled that a state law exempting religious magazines and books from sales and use taxes subverted the separation of church and state. Justice William Brennan, writing for the majority, said that a sales-tax exemption for “periodicals published or distributed by a religious faith and consisting wholly of writings promulgating the teaching of the faith lacks sufficient breadth to pass scrutiny under the Establishment Clause.”

Brennan concluded that Texas had no secular objectives for granting the sales-tax exemptions for religion. Brennan said the tax break amounted to “state sponsorship of religious belief.”

Like the high court in Texas Monthly, Gorman ruled that Rhode Island's sales-tax exemption for religious texts was backed by no secular state purpose.

“The sales tax exemption under Rhode Island law has no discernible secular objective that would justify the preference for religious documents and the statute fails to provide similar benefits for nonreligious publications,” Gorman wrote in Cellar Stories Books v. Clark. “Because of these limitations, the tax code must be construed as an endorsement of religion, and, therefore, violative of the Establishment Clause.

“The state's contentions supporting the constitutionality of the statute cannot overcome the absence of a clear secular interest in the exemption for religious documents,” Gorman continued. “This fact, and the obvious benefit conferred on religious writings, are sufficient to show that the tax exemption promotes religion in a manner prohibited by the First Amendment.”

Partington said that Texas Monthly would probably be decided differently today. She noted that the U.S. Supreme Court declined to review a 1st U.S. Circuit Court of Appeals ruling that upheld a law exempting religious employers from paying taxes to fund a state unemployment insurance program. The 1st Circuit includes Maine, New Hampshire, Massachusetts and Rhode Island.

Partington urged the Rhode Island Supreme Court to heed the 1st Circuit's 1997 ruling in Rojas v. Fitch.

In Rojas, the federal court found that Rhode Island's unemployment tax exemptions for religious groups had a secular purpose. The 1st Circuit ruled that the exemption helped the state operate the unemployment program and that no evidence was offered to show the exemption advanced religion.

“Efficient administration of the unemployment compensation system is particularly enhanced through the exemption for religion because it eliminates the need for the government to review employment decisions made on the basis of religious rationales,” the 1st Circuit stated. “The exemption for religions contained therein, when viewed in context, is innocuous.”