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Sunday, May 26, 2024 | Back issues
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Justices Allow Tax Credit for Religious Tuition

WASHINGTON (CN) - A sharply divided Supreme Court found that Arizona taxpayers do not have a legal right to challenge a state law that allows residents to receive tax credits for contributions to non-profit organizations.

Noteworthy on its face, the case also inspired a fiery decent written by Justice Elena Kagan, the first she's penned since joining the high court in August 2010.

The Arizona law was passed in 1997 in order to encourage greater educational choice for disadvantaged elementary school children. It gives tax credits for contributions to school tuition organizations (STOs), which then use the contributions to provide scholarships to students attending private schools, including religious schools.

Justice Anthony Kennedy, joined by the four conservative justices, said that taxpayers only have the so-called "legal standing" to bring such a suit if it involves a government expenditure, not a tax credit.

"When Arizona taxpayers choose to contribute to STOs, they spend their own money, not money the state has collected from respondents or from other taxpayers," Kennedy wrote, noting that the "respondents and other Arizona taxpayers remain free to pay their own tax bills, without contributing to an STO.

"Likewise, respondents are likewise able to contribute to an STO of their choice, either religious or secular," he continued. "And respondents also have the option of contributing to other charitable organizations, in which case respondents may become eligible for a tax deduction or a different tax credit."

Because the court found that the taxpayers could not bring the suit, it did not reach a decision on whether the law itself is constitutional.

But in the first dissent of her tenure on the court, Justice Elena Kagan strongly disagreed with the majority's reasoning that the taxpayers' right to bring suit is only triggered by a government expenditure.

"Today's decision devastates taxpayer standing in Establishment Clause cases," Justice Kagan wrote, adding later that "The court's opinion offers a road map - more truly, a one-step instruction - to any government that wishes to insulate its financing of religious activity from legal challenge."

"Taxpayers who oppose state aid of religion have equal reason to protest whether that aid flows from the one form of subsidy or the other," Kagan continued. "Either way, the government has financed the religious activity. And so either way, taxpayers should be able to challenge the subsidy."

Kagan was joined in her dissent by Justices Ruth Bader Ginsburg, Stephen G. Breyer and Sonia Sotomayor.

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