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Court Will Rule on Sales-Tax Exemptions for Church Publications

March 21, 1988

WASHINGTON (AP) _ The Supreme Court today agreed to decide whether states may impose sales taxes on most books, newspapers and magazines while exempting religious publications.

The justices said they will review a Texas court ruling that said such a tax neither violates equal-protection rights nor breeches the constitutionally required separation of church and state.

From October 1984 through October 1987, sales of books and newspaper subsciptions were subjected to the Texas sales tax. But ″periodicals published or distributed by a religious faith and that consist wholly of writings promulgating the teaching of the faith″ were exempt from tax.

Last October, the Texas Legislature reinstated the broad tax exemption that had existed for sales before 1984.

Texas Monthly, a general interest magazine with a circulation of about 280,000, challenged the tax law after paying more than $149,000 in sales taxes in 1985.

The magazine’s lawsuit sought a refund, contending that the tax impermissibly discriminated based on content and amounted to an unconstitutional promotion or advancement of religion.

A state trial judge ruled that the sales tax was invalid but a state appeals court overturned that ruling by a 2-1 vote.

The Texas Supreme Court refused to hear Texas Monthly’s appeal last Sept. 23.

The nation’s highest court last year struck down an Arkansas tax that was imposed on sales of general interest magazines but exempted newspapers and religious, professional, trade and sports magazines.

The justices, voting 7-2, said then that any state would face a heavy burden in trying to justify a ″content-based approach to taxation of magazines.″

But the Texas appeals court drew a distinction between the invalidated Arkansas tax and the tax challenged by Texas Monthly.

″The Supreme Court determined that the (Arkansas) tax exemption ... was so broad that it had the effect of singling out a very small group of magazines for taxation,″ the Texas court said. ″This appeal, to the contrary, presents the opposite situation. The great mass of publishers remain subject to the sales tax.″

The Texas Monthly appeal acted on today was supported in ″friend-of-the- cour t″ briefs submitted by the Magazine Publishers of America and the American Booksellers Association.

But Texas Attorney General Jim Mattox urged the justices to reject the appeal, noting that it attacks the religious-publication exemption rather than the sales tax.

″The result of (Texas Monthly’s) argument woud be that religious periodicals would become subject to taxation. (Texas Monthly) would still be responsible for the tax it paid to the state of Texas and could not recover the amount it paid under protest,″ Mattox contended.

The case is Texas Monthly vs. Bullock, 87-1245.

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