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To the extent that imposition of a generally applicable tax merely decreases the amount of money an appellant has to spend on its religious activities, any such burden is not constitutionally significant.
California's tax code required retailers to pay a 6-percent sales tax on in-state sales of tangible personal property and to collect from state residents a 6-percent use tax on such property purchased outside the state. The tax code also provided for the registration of sellers in order to facilitate reporting and payment of the sales tax, but no fee was charged for registering, and the tax was due regardless of whether there was preregistration. Appellant religious organization, incorporated in Louisiana, offered for sale in California various religious books, tapes, records, and other religious merchandise (1) at "evangelistic crusades" conducted in California, (2) in the organization's monthly magazine, which was sold nationwide by subscription, and which included an order form listing various religious items for sale and their unit price, and (3) through radio, television, and cable television broadcasts on local California stations. In 1981, California's Board of Equalization audited the organization and advised it to report and pay the state sales tax on all sales made at its California crusades, and to register as a seller pursuant to the tax code. The Board also said that the organization had a sufficient nexus with the state to require the organization to collect and report the state use tax on its mail-order sales to California purchasers. Based on the organization's California sales figures for religious materials from 1974 to 1981, the Board determined that the organization owed more than $ 118,000 in sales and use taxes, plus interest and a penalty. The organization, claiming that the imposition of tax on religious materials violated the Federal Constitution's First Amendment, filed a petition for redetermination. Following a hearing and an appeal to the Board, the Board deleted the penalty but otherwise redetermined the matter without adjustment. Pursuant to state procedural law, the organization paid the amount and filed with the Board a petition for redetermination and refund. The Board denied the petition, and the organization brought suit in state court for a refund. The trial court entered judgment for the Board, and the Court of Appeal of California, Fourth District, affirmed.
Were the California's sales and use taxes on religious materials unconstitutional?
Rejecting the religious organization's contentions, the Supreme Court affirmed the appellate court's decision, which affirmed the trial court's judgment holding that the religious organization was not entitled to a tax refund of any tax. The collection and payment of the generally applicable tax in this case imposed no constitutionally significant burden on the religious organization's religious practices or beliefs. Accordingly, there was no violation of the Free Exercise Clause. Also, the imposition of sales and use tax liability on the religious organization threatened no excessive entanglement between church and state. Thus, there also was no violation of the Establishment Clause.