TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-02-00066-CV
Carole Keeton Strayhorn, in her Official Capacity as Comptroller of
Public Accounts, Appellant
v.
Ethical Society of Austin, f/k/a Ethical Culture Fellowship of Austin, Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 353D JUDICIAL DISTRICT
NO. 98-12853, HONORABLE PAUL DAVIS, JUDGE PRESIDING
OPINION
The Ethical Society of Austin (Athe Ethical Society@), a congregation of individuals who meet
regularly to practice a belief system known as AEthical Culture,@ seeks tax-exempt status as a religious
organization under the tax code. See Tex. Tax Code Ann. '' 171.058, 151.310(a)(1), 156.012 (West
2002). The Texas Comptroller denied the application on the ground that the Ethical Society must
demonstrate that it requires belief in a AGod, Gods, or higher power@ (hereinafter Athe Supreme Being test@)
in order to qualify. The trial court found that the Ethical Society should not have been denied tax-exempt
status because the Comptroller=s test was unconstitutionally underinclusive and that the Ethical Society
should have qualified for the requested tax exemptions. We must now decide whether a state government
may, consistent with the First Amendment to the United States Constitution, require a group to demonstrate
its belief in a ASupreme Being@ in order to be considered a religion for statutory purposes. Because the
Comptroller=s test fails to include the whole range of belief systems that may, in our diverse and pluralistic
society, merit the First Amendment=s protection, we will affirm the trial court=s judgment.
BACKGROUND
In 1995, the Ethical Society, then known as the AEthical Culture Fellowship of Austin,@
organized the first ethical culture group in Texas. Society members characterize themselves as Aethical
humanists,@ sharing the unifying belief that Awithin the human experience ethics is central.@1 In 1996, the
Society applied with the Comptroller=s Office for tax-exempt status from sales, use, excise, hotel, and
franchise taxes as a Areligious@ organization. See Tex. Tax Code Ann. '' 171.058, 151.310(a)(1),
156.012.
1
AEthical Culture@ (sometimes known as AEthical Humanism@) is a nationwide and international
movement established in 1876.
2
The Society filed a tax exemption application accompanied by detailed information about its
beliefs and activities. Initially, the Comptroller=s office determined that the Society did not qualify for tax-
exempt status. However, after receiving additional information the Comptroller=s office set the application
for a higher-level review. The Tax Policy Group, which comprises the highest ranking officials in the
Comptroller=s office, considered the entire application, including several citations to United States Supreme
Court decisions that seemed to indicate that the Society was, indeed, a religious organization. Based on this
record, Karey Barton, an official of the Comptroller=s office,2 sent a letter to the Society indicating that it
qualified for the requested tax exemptions.
Shortly after the Society received the letter granting it tax-exempt status, the local
newspaper published a story detailing the determination made by the Comptroller=s office. See Ken
Herman, Godless Group Gets Religious Exemption, Austin American-Statesman, June 26, 1997, at B1.
Then-Comptroller John Sharp learned about the Tax Policy Group=s determination from the article. The
Comptroller=s office soon issued a Aletter of correction,@ stating that the original determination applied and
that the Society was not a Areligious organization@ for purposes of the tax code. Subsequently, the
Comptroller confirmed that the Society did not qualify for a tax exemption because it failed to meet the
2
The record reflects that Barton had full authority to make this determination based on the input of
the Tax Policy Group.
3
definition of Areligion,@ which the Comptroller construes to require worship of a Supreme Being for the
purpose of interpreting the administrative rules.3
3
Sharp=s successor, Carole Keeton Strayhorn, has adopted Sharp=s position regarding the
Society=s request for tax-exempt status.
4
The Ethical Society challenged the Comptroller=s decision. Sitting without a jury, the trial
court determined that, by using its formulation of the ASupreme Being@ test as the primary basis for
determining which organizations are Areligious@ for tax-exemption purposes, the Comptroller had violated
the First Amendment.4 On appeal, the Comptroller contends that the ASupreme Being@ test creates a
necessary bright-line rule protecting the state from being required to award tax exemption to any group that
calls itself Areligious.@ Relying on language contained in the United States Supreme Court=s opinion in
Wisconsin v. Yoder, 406 U.S. 205 (1972), the Comptroller asserts that its rule is consistent with the
principle that Areligious@ beliefs must be clearly delineated from Apersonal or philosophical@ beliefs. The
Ethical Society, joined by various amici curiae, responds that the Comptroller=s test too narrowly defines
the scope of religion. Relying on several United States Supreme Court opinions that seem to include Ethical
Culture within a group of religions, the Ethical Society argues that the ASupreme Being@ test, when applied
as the sole determining factor for granting tax exemptions, does not adequately account for the range of
belief systems which comprise the broad spectrum of religious faith in contemporary society. We agree with
the Ethical Society and will affirm.
DISCUSSION
The Supreme Being Test
4
In addition, the trial court ruled that the denial of tax-exempt status violated the Texas Tax Code
and the Equal Protection Clause of the U.S. Constitution and permanently enjoined the Comptroller from
using Aworshiping God@ or Aworshiping a Supreme Being@ as the litmus test for determining an organization=s
tax-exempt status. The trial court also awarded attorney=s fees to the Ethical Society.
5
Because this dispute presents us with a constitutional issue, we review the trial court=s
decision de novo. See, e.g., Perry v. Del Rio, 67 S.W.3d 85, 91 (Tex. 2001). Thus, we owe no
deference to the trial court=s decision and may proceed to resolve the issues presented as a matter of law.
Quick v. City of Austin, 7 S.W.3d 109, 116 (Tex. 1998).
The Legislature has provided that certain religious, educational, and charitable groups are
exempt from the franchise, sales and use, and hotel taxes.5 See Tex. Tax Code Ann. '' 171.058,
151.310(a)(1), 156.012. The Comptroller=s implementing administrative rules require that a group be
organized for the purpose of religious worship.6 See 34 Tex. Admin. Code '' 3.161(a)(3), .322(a)(3),
.541(c)(3) (2002). Because exempt status is not favored by state law, any organization seeking a tax
exemption has the burden to show, without doubt, that it meets the applicable requirements and any doubt
regarding the organization=s qualifications will result in denial of the exemption. See id. '' 3.322(a)(1),
(a)(2) (sales and use tax), .541(a)(1) (franchise tax), .161(c) (hotel tax) (2002). The Comptroller assesses
each application according to a non-exclusive set of factors set out in internal agency documents, most of
which are objective factors, including whether the organization meets regularly for services, when and where
services are held, the approximate number of people attending services, and whether the organization
ordains clergy. In addition, the Comptroller has apparently made an informal determination, applied in this
case, that an organization must meet what we have called the Supreme Being test, requiring belief in a AGod,
Gods, or higher power@ in order to qualify for tax-exempt status.
5
The section of the tax code dealing with franchise taxes states that:
6
This Supreme Being requirement does not appear in the tax code or the administrative
code. From the documents contained in the record, it appears that the Ethical Society met all of the
objective requirements contained within the Comptroller=s internal memorandum: among other things, it
holds regular meetings, maintains a separate bank account that profits no individual, and undertakes only
activities having to do with its congregational meetings. The Tax Policy Group, based on the Ethical
[a] nonprofit corporation organized for the purpose of religious worship is exempted
from the franchise tax.
Tex. Tax Code Ann. ' 171.057 (West 2002).
The section of the tax code dealing with sales and use tax states that for religious, educational, and
public service organizations:
(a) A taxable item sold, leased, or rented to, or stored, used, or consumed by any of
the following organizations is exempted from the taxes imposed by this chapter:
(1) an organization created for religious, educational, or charitable purposes if no
part of the net earnings of the organization benefits a private shareholder or
individual and the items purchased, leased, or rented are related to the
purpose of the organization.
Tex. Tax Code Ann. ' 151.310(a)(1).
The hotel tax provision is essentially identical to the sales and use tax provision. See Tex. Tax
Code Ann. ' 156.102(a).
6
The Comptroller=s rules define a religious group for each of the tax exemptions in question as:
an organized group of people regularly meeting for the primary purpose of holding,
conducting, and sponsoring religious worship services according to the rites of their
sect.
34 Tex. Admin. Code '' 3.161(a)(3), 3.322(a)(3), 3.541(c)(3) (2002).
7
Society=s application, granted the exemption. It appears, then, that the Comptroller=s decision was based
entirely on the determination that Ethical Culture does not require belief in a Supreme Being.
As a background matter, we recognize that the State may, consistent with the Constitution,
exempt religious groups from taxation. See Mueller v. Allen, 463 U.S. 388, 403 (1983); Walz v. Tax
Comm=n of NewYork, 397 U.S. 664, 707-08 (1970). We also recognize that the State has a compelling
interest in insuring that only qualified religious organizations receive the tax exemptionCit cannot be sufficient
for a group simply to label itself as a religion in order to enjoy tax-exempt status. See, e.g., Church of the
Chosen People v. United States, 548 F. Supp. 1247, 1252-53 (D. Minn. 1982). However, this case
involves a determination of whether the Comptroller=s Supreme Being litmus test is a valid means for
determining whether the Ethical Society is a religious group under the tax code.
Although Texas courts have not addressed this issue, the slate on which we write is not
blank. Many courts and state administrative agencies have long determined that Ethical Culture is a religion
for the purpose of interpreting various government regulations. See, e.g., Washington Ethical Soc=y v.
District of Columbia, 249 F.2d 127, 129 (D.C. Cir. 1957) (interpreting Washington, D.C., property tax
exemption); Society for Ethical Culture v. Spatt, 415 N.E.2d 449, 452 (N.Y. 1980) (Ethical Society
held religious organization for purpose of analyzing impact of architectural preservation law on its property);
Murray v. Comptroller of the Treasury, 216 A.2d 897, 901 (Md. 1965) (Maryland religious tax
exemption constitutionally sound in part because Ethical Culture considered tax-exempt); Fellowship of
Humanity v. County of Alameda, 315 P.2d 394, 410 (Cal. App. 1957) (interpreting California
constitution to require tax exemption for Ethical Culture under tax code); State of Illinois v. Ethical
8
Humanist Soc=y, 95 ST 0257, *10 (December 14, 1995) (administrative decision of Illinois Department of
Revenue that Ethical Culture merited tax exemption). Although none of these determinations are based
explicitly on First Amendment grounds, they all represent the reasoned application of statutes in light of
contemporary cultural and religious values. This judicial history is persuasive in suggesting that the
Comptroller=s test and decision are out of step with the general understanding of the grant of tax exemptions
to Areligious@ organizations in the United States.
The Comptroller relies on the supreme court=s declaration in Wisconsin v. Yoder that a way
of life, however virtuous and admirable, will not have First Amendment protection unless it is rooted in
Areligious belief.@ 406 U.S. 405, 415 (1972). The Comptroller argues that only its Supreme Being test
adequately distinguishes between personal and religious beliefs. Furthermore, because the test
encompasses the generic concept of a supernatural reality, the Comptroller asserts that it is sufficiently
broad to account for the various diverse religious views existing in contemporary society. The
Comptroller=s argument rests on its understanding of the development of the supreme court=s interpretation
of the First Amendment religious protections. Initially, the First Amendment was, indeed, understood to
protect only those who believed in a monotheistic deity. See Davis v. Beason, 133 U.S. 333, 342 (1890)
(AThe term >religion= has reference to one=s views of his relations to his Creator, and to the obligations they
impose of reverence for his being and character, and of obedience to his will.@).
However, in two more recent cases interpreting the federal conscientious objector statute,
United States v. Seeger, 380 U.S. 163 (1965), and Welsh v. United States, 398 U.S. 333 (1970), the
Court adopted a broader definition of religion. The Universal Military Training and Service Act exempted
9
from military service persons Awho by reason of their religious training and belief are conscientiously
opposed to participation in war in any form.@ See Seeger, 380 U.S. at 736. The statute defined religious
belief as Abelief in a relation to a Supreme Being involving duties superior to those arising from any human
relation.@ See id. at 741. In interpreting the statute, the Seeger court carefully examined a number of
religious and philosophical viewpoints in order to avoid too narrow an analysis of individual belief. Id. at
746-47. Thus, in the context of interpreting a specific statutory provision, the Court saw fit to interpret the
term Areligion@ broadly in order to take into account the breadth of religious opinion in American society.
According to the Comptroller, however, in Yoder the Court took a step back from its
position in Seeger and Welsh. Yoder involved an attempt by the state of Wisconsin to enforce its
mandatory schooling provisions, which required children to attend school until the age of sixteen, against a
group of Old Order Amish, who maintained that it would offend their religious beliefs to require their
children to attend a consolidated secondary school. The Court held that the state=s interest in keeping the
children in school did not outweigh the Amish community=s interest in maintaining its religious independence.
In making this determination, the Court observed that:
[a] way of life, however virtuous and admirable, may not be interposed as a barrier to
reasonable state regulation of education if it is based on purely secular considerations; to
have the protection of the Religion Clauses, the claims must be rooted in religious belief. . . .
Thus, if the Amish asserted their claims because of their subjective evaluation and rejection
of the contemporary secular values accepted by the majority, much as Thoreau rejected the
social values of his time and isolated himself at Walden Pond, their claims would not rest on
a religious basis. Thoreau=s choice was philosophical and personal rather than religious,
and such belief does not rise to the demands of the Religion Clauses.
10
Yoder, 406 U.S. at 215-16 (footnotes omitted) (emphasis added). According to the Comptroller, this
language counteracts any expansive reading of religion undertaken in the conscientious objector cases,
because it focuses the First Amendment analysis squarely, and exclusively, on the distinction between
religious and personal or philosophical beliefs.
In support, the Comptroller cites several cases that have relied on this distinction in making
the same analysis. See, e.g., Alvarado v. City of San Jose, 94 F.3d 1223, 1229 (9th Cir. 1996) (New
Age beliefs not religious); Mason v. General Brown Cent. Sch. Dist., 851 F.2d 47, 51-52 (2d Cir. 1988)
(chiropractic practices not religious); Africa v. Pennsylvania, 662 F.2d 1025, 1036 (3d Cir. 1981)
(organization promoting Anatural@ lifestyle and requiring raw food diet not a religion in part because based on
personal, philosophical beliefs). According to the Comptroller, the State has an overriding interest in
determining with ease and clarity whether a group is actually Areligious@ or whether it merely labels itself as
religious. See, e.g., Church of the Chosen People, 548 F. Supp. at 1252-53 (rejecting organization=s tax
exemption claim based on members= mere assertions of religious status); Church of Pan v. Norberg, 507
A.2d 1359,1363 (R.I. 1986) (primarily political organization not entitled to tax exemption). The
Comptroller paints Ethical Culture as a belief system based only on the unifying belief that Awithin the human
experience ethics is central.@ As one of its founding figures, Felix Adler, wrote: AOur ethical religion has its
basis in the effort to improve the world and ourselves morally.@ Although Ethical Culture does not exclude
individuals who profess a faith in a particular understanding of divinity or religion, it is also open to those
who do not claim such beliefs. As the American Ethical Union, an umbrella group for Ethical Culture,
11
reports, AThe Ethical Societies have no creed of theology or metaphysics, no set doctrines concerning the
unknown mysteries of life. There is no claim to a belief in a supernatural universe or Supreme Being.@
Likewise, many of the members of the Ethical Society who were deposed in the course of the trial were
reluctant to classify the society as a Areligion@ because, for them, it dealt with human relationships.
According to the Comptroller, statements like these, which emphasize Ahuman experience,@ indicate that the
Ethical Society is only focused on personal, philosophical beliefs because, by the Comptroller=s own
definition, the Ethical Society=s principles do not embrace any reality beyond that perceived in human
relationships.7
7
The Comptroller also cites us to Peloza v. Capistrano Unified School District, which denies
that Aevolutionism or secular humanism are >religions= for Establishment Clause purposes,@ 37 F.3d 517,
521 (9th Cir. 1994), and asks us to adopt Peloza=s reasoning. However, Peloza dealt with Asecular
humanism,@ an attempt to characterize a group of unorganized secular viewpoints as a religion defined as the
opposite of Acreationism.@ See id.
12
The Ethical Society replies, as a preliminary matter, that the supreme court has, at least in
passing, referred to Ethical Culture as a creedless religion. In Torcaso v. Watkins, 367 U.S. 488 (1961),
the Court invalidated a Maryland provision requiring notaries public to swear an oath Ato God@ on the
grounds that such a requirement would Aaid those religions based on a belief in the existence of God as
against those religions founded on different beliefs.@ Id. at 495. In a footnote, the Court included Ethical
Culture in a list with Buddhism and Taoism as an example of a religion that did not teach Awhat would
generally be considered a belief in the existence of God.@ Id. at 495 n.11. Likewise, in Seeger, the Court
mentioned Ethical Culture in describing the breadth of religious opinion in the United States.8 Seeger, 380
8
As part of its catalogue of the scope of religious faith and identity in the United States, the Seeger
court referenced a book written by one of the leaders of the Ethical Culture movement, Dr. Saville Muzzy,
Ethics as a Religion (1951). The passage read:
Instead of positing a personal God, whose existence man can neither prove nor
disprove, the ethical concept is founded on human experience. It is anthropocentric,
not theocentric. Religion, for all the various definitions that have been given of it, must
surely mean the devotion of man to the highest ideal that he can conceive. And that
ideal is a community of spirits in which the latent moral potentialities of men shall have
been elicited by their reciprocal endeavors to cultivate the best in their fellow men.
What ultimate reality is we do not know; but we have the faith that it expresses itself in
the human world as the power which inspires in men moral purpose.
Thus the AGod@ that we love is not the figure on the great white throne, but the perfect
pattern, envisaged by faith, of humanity as it should be, purged of the evil elements
which retard its progress toward >the knowledge, love, and practice of the right.=
United States v. Seeger, 380 U.S. 163, 183 (1965) (citing Muzzy at 95, 98). The Comptroller takes the
position that this passage, as reported in the supreme court=s opinion, disqualifies the Ethical Society from
being a religious organization because it disclaims any belief in God. While it may be debatable whether this
passage actually constitutes a denial of the existence of God or rather an attempt to articulate a particular
vision of God, we reject the Comptroller=s assertion because it does no more than beg the question.
13
U.S. at 746. The Ethical Society contends that, because the supreme court has twice referred to its faith
system in addressing questions regarding the scope of the First Amendment=s protections, we should
consider it to be a religion.
Although the supreme court has not unambiguously declared that the practice of Ethical
Culture is a religion protected by the First Amendment, it does not follow that under an appropriate First
Amendment analysis Ethical Culture cannot qualify as a religion. We reject the Comptroller=s reliance on
the language regarding the distinction between personal and religious beliefs outlined in Yoder. While Yoder
restates the principle that the First Amendment protects religions, as opposed to purely personal belief
systems, it neither introduces a new concern into the Court=s religion analysis nor articulates a workable test
for distinguishing personal from religious beliefs. The protection of the freedom of religious conscience,
without regard to majority opinion, has been an element of American law since the founding of the Republic.
See Everson v. Board of Educ., 330 U.S. 1, 8-10 (1947) (stating that First Amendment stemmed from
experience of religious majority attempting to impose its views on dissenters, particularly through the
imposition of taxes); see also U.S. v. Macintosh, 283 U.S. 605, 632-33 (1931) (Hughes, C.J., dissenting)
(outlining history of the Aconscientious objector@ doctrine).
Judges are not oracles of theological verity, and the Founders did not intend for them to be
declarants of religious orthodoxy. See Africa, 662 F.2d at 1030 (citing 1 The Papers of Thomas
Jefferson 525, 547 (J. Boyd ed. 1950)). As Justice Clark stated in Seeger, the distinction between
personal and religious beliefs is inherently difficult because Ain no field of human endeavor has the tool of
language proved so inadequate.@ Seeger, 380 U.S. at 175. Any inquiry that delves too closely into the
14
textual references made by a religion to the existence of God puts the courts in danger of making
determinations based on dimly understood, and perhaps misconceived, characterizations of unfamiliar
religions. See id. at 190 (Douglas, J., concurring) (discussing potential of Supreme Being test to exclude
belief structures of well-established religions, such as Buddhism and Hinduism); see also International
Soc=y for Krishna Consciousness v. Barber, 650 F.2d 430, 439-40 (2d Cir. 1981) (definition of religion
cannot hinge on ASupreme Being@ test in pluralistic society); Theriault v. Silber, 547 F.2d 1279, 1281 (5th
Cir. 1977) (ASupreme Being@ test too narrow to account for contemporary religious practices). In sum, the
Comptroller=s position merely begs the question by looking to Yoder for a definitive test. Although Yoder
reaffirms that the relevant question is whether a set of beliefs is religious or philosophical, it does not outline
a useful test for making that determination.
Serious contemplation of the supreme court=s commitment to protecting the full range of
religious belief, as expressed in Seeger, requires us to reject the proposition that a narrowly defined
ASupreme Being@ test can account for the broad range of religious faith protected by the First Amendment.
Although the Ethical Society=s tenets and beliefs may not explicitly reference a divinity, they evidence enough
of a sense of spiritual feeling that the Society=s claim to religious status should be carefully assessed. The
Comptroller=s litmus test does not allow for a closer assessment of the Ethical Society=s claims and, because
it forecloses careful evaluation of the ways in which Ethical Humanism may be more religious than personal,
it violates the First Amendment.9 Therefore, we hold that the Comptroller=s reliance on a Supreme Being
9
Likewise, we reject the Comptroller=s argument that our assessment of the Ethical Society=s
religious nature and purpose should be based on the Acommon understanding@ of the term Areligion.@
Although many of the definitions cited to us by the Comptroller do include the concept of a Supreme Being
15
litmus test to determine whether an organization qualifies as a religion for purposes of the tax code is
constitutionally infirm.
The Ethical Society=s Status under the Tax Code
or a supernatural reality, e.g., Black=s Law Dictionary 1292 (6th ed. 1990) (religion Ain its broadest sense
includes all forms of belief in the existence of superior beings exercising power over human beings. . .@), the
purpose of the First Amendment is to protect dissenters from being forced to take the position favored by
the majority in violation of their own religious consciences. See Everson v. Board of Educ., 330 U.S. 1,
8-10 (1947). Because the scope of religious belief defies easy characterization, we believe that a
constitutionally sufficient inquiry cannot be bound by this particular common understanding of religion.
Otherwise, the courts would find themselves as a matter of law declaring entire belief systems that certainly
qualify as religionsC such as Buddhism, Taoism, and some strains of UnitarianismCto be outside of the First
Amendment=s protection.
16
Having determined that the Comptroller=s test is invalid under the First Amendment, we are
left with the question of whether, under an appropriate analysis, the Ethical Society constitutes a religious
group.10 Both parties refer us to the line of cases relying on the three-factor test laid out by Judge Adams in
his concurrence in Malnak v. Yogi, 592 F.2d 197, 207-210 (3d Cir. 1979) (Adams, J., concurring), and
later applied by him in Pennsylvania v. Africa, 662 F.2d 1025, 1032 (3d Cir. 1981).11 The Malnak test
gives a court the basis on which to determine whether an unfamiliar religion is entitled to First Amendment
protection by comparing it to familiar religions. The test requires that a set of beliefs: (1) address
fundamental and ultimate questions having to do with deep and imponderable matters such as the meaning of
life and death or man=s role in the universe; (2) be broad in scope and comprehensive in nature; and (3) be
accompanied by the presence of certain formal and external signs. See Africa, 662 F.2d at 1032. The
Comptroller takes the position that Ethical Culture does not meet the Malnak test because the inclusion of a
transcendental being or metaphysical experience is essential to making the case that a new religion is
10
The Comptroller cites several concurring and dissenting opinions that might suggest that,
given the different nature of federal and state government, the Establishment Clause and other elements of
the Bill of Rights incorporated against the states by the Fourteenth Amendment should be applied differently
in the state courts. E.g., Zelman v. Simmons-Harris, __ U.S. __, 122 S. Ct. 2460, 2480-81, 153 L. Ed.
2d 604, 633 (2002) (Thomas, J., concurring). The situation before us, however, encompasses not the
policy decisions made by a state government regarding religious programs and activities generally, but a
specific determination regarding a specific belief community. We believe that the First Amendment
protections must be at their strongest when the government feels itself called upon, by administrative
proceeding or legislative mandate, to categorize the content of various belief systems as religious or
nonreligious.
11
Because neither side has placed in issue the sincerity of the Ethical Society=s beliefs, we are not in
the situation of courts dealing with organizations seeking exempt status which are Aobviously shams and
absurdities@ and whose leaders Aare patently devoid of religious sincerity.@ See Theriault v. Carlson, 495
F.2d 390, 395 (5th Cir. 1974).
17
analogous to a traditionally recognized religion. The Ethical Society responds that, because it puts weight on
external indicia of religious belief, the Malnak test supports its claim to religious status. While we have
already concluded that the requirement of a belief in a Supreme Being cannot, by itself, serve as the litmus
test for determining which organizations merit religious tax exemptions, we believe that the Malnak test
provides an appropriate guideline for the Comptroller to apply and, further, that Ethical Culture meets the
test=s requirements.
Ultimate Concerns
Ultimate concerns, as addressed by traditional religions, are characterized by their
adherence to, and promotion of, certain Aunderlying theories of man=s nature or his place in the Universe.@
Africa, 662 F.2d at 1033 (citing Founding Church of Scientology v. United States, 409 F.2d 1146,
1160 (D.C. Cir. 1969)). Such concerns might include the worship of a Supreme Being; more generally,
they include attempting to situate man within existence and resolving questions having to do with such things
as life and death, right and wrong, or good and evil. Id. By focusing on the nature of the questions posed
by a group, the court is put in a better position to compare that group to others that are clearly religious,
while avoiding the grant of tax-exempt status to groups that, by any definition, should not be considered
religious. See, e.g., Mason v. General Brown Cent. Sch. Dist., 851 F.2d 47 (2d Cir. 1988) (general
belief, based on chiropractic training, that immunizations are unhealthy for child not religious belief for First
Amendment purposes and Chiropractic group not religious group because of lack of religious belief).
The Ethical Society is part of the American Ethical Union (Athe Ethical Union@), an umbrella
group for Ethical Culture congregations founded in 1889. We must assess the Ethical Society=s claims in
18
context of its membership in the larger organization. The Ethical Union, rather than adopting a formal creed,
allows each of its societies to develop relatively independently.12 Many of the societies take a less
Aspiritual@ approach. However, other societies adopt the religious and metaphysical approach embraced by
Felix Adler, one of Ethical Culture=s seminal thinkers. Faced with what he considered to be the Adefinite
and permanent disappearance of the individualistic conception of Deity,@ Adler sought to articulate the
ethical underpinning he believed to be the foundation of all the great religions. Accordingly, he formulated
the concept of a Aspiritual and ethical ideal,@ now often referred to as the AEthical Ideal@ or AEthical
Manifold.@ For Adler, the attempt to reach this understanding reflected a fundamental, and therefore
observable, transcendent reality underlying human thought and consciousness. He, and the members of the
Ethical Culture movement, refused to adopt this position as an official doctrine because they were
committed to the discovery of ethical principles by individuals learning from their own experiences. Ethical
Culture, in its contemporary form, begins from the proposition that its members cannot simply accept a
belief in a God or higher power as the basis of their religious experience. However, while it rejects the idea
of Aspiritual revelations,@ it does not follow that Ethical Culture rejects a religious approach to the ultimate
questions facing humankind. In place of discussing a supernatural reality, Ethical Culturists see themselves
as discovering religious value and direction from their lives and their relationships with other people. This is
more than a simple statement that they consider Alife@ to be an example of religious experience; it is a
12
In this regard, according to the record, Ethical Culture is similar to the Unitarian Universalist
Church, which allows each of its congregations to adopt differing approaches to doctrine and belief.
19
commitment to an attempt to discover, through observance and debate, the moral truths that underlie human
experience.
Our assessment of the scope of the questions posed by Ethical Culture might be debatable.
There can be no doubt that Ethical Culture attempts to address the religious needs of its members without
reference to a God or a supernatural reality. However, we believe that in its focus on situating each
individual within a network of ethical decision-making as the central concern of that individual=s human
experience, Ethical Culture makes at least a colorable claim at posing the kinds of questions that have been
considered by other courts to be Aultimate@ in nature.
Comprehensive Belief System
The requirement that a belief system be comprehensive helps to ensure that we do not
extend the claim of religion to cover a set of isolated, unconnected ideas. This might be restated as a claim
to an Aultimate and comprehensive >truth.=@ See Malnak, 592 F.2d at 209. It is not enough to show that an
individual=s actions are based on deeply held convictions as manifested in their daily lives; rather our analysis
should inquire as to whether those convictions are based on a uniform and articulable set of principles which
lay a claim to universal application. The Comptroller points us to Alvarado v. City of San Jose, in which
the court declared that New Age beliefs have no religious significance because Athere is no text, creed, or
organized group@ involved. 94 F.3d 1223, 1225 (9th Cir. 1996).
By contrast, Ethical Culture has a developed body of literature and a set of principles. As
the Ethical Union posits, AWe define ethics not simply and solely in terms of what is right or wrong, but in
the larger sense of what is good and what is true.@ Thus, according to the Ethical Union, any attempt to
20
reduce its principles to a specific creed would violate its adherents= ability to articulate truth and goodness
through the practices of Ethical Culture. Some Ethical Culture documents include injunctions to Atreat each
other as ends, not merely as means,@ that Aself-reflection and our social nature require us to shape a more
humane world,@ and that Alife itself inspires religious response.@ Books and essays on Ethical Culture and its
practice have been routinely published over the more than a century during which the movement has existed.
Furthermore, beyond simply asserting the primacy of a particular narrow idea or assumption, Ethical
Culture attempts to create a comprehensive response to the problems faced in life based on a common
contemplative practice. While it is true that Ethical Culture congregations welcome leaders trained in other
religious traditions, including priests and rabbis, such pluralism is not inconsistent with a wide religious
viewpoint attempting to assimilate various opinions about religious faith. Other religious groups maintain an
interest in collectivist or comparative religious observance without thereby jeopardizing their own religious
status. In our review of their literature and beliefs, the Ethical Society appears to offer a set of beliefs
intended to allow an individual to assess his own relationship to creation through the experience of human
interaction and ethical inquiry.
More fundamentally, the Ethical Union sees the totality of this debate, in both writing and
observance, as an attempt to arrive at an understanding of Ahumanity=s place in the universe.@ Ethical
Culture is not merely a disassociated string of ethical commitments, but a commitment to a particular
discipline of spiritual observation. The emphasis the Society places on what Adler described as the Areality
producing functions of the mind@ focuses its members on deriving moral commitment from an understanding
21
of human psychological experience and offers an absolute, and universal, basis on which Ethical Society
members are to structure their own lives.
External Signs
Because the absence of external signs of religious practice should not be considered
dispositive of a group=s religious status, see Malnak, 592 F.2d at 209, the Comptroller declines to discuss
the external factors which might indicate that Ethical Culture should, indeed, be considered a religion for
First Amendment purposes. Such external signs, however, may still be useful in determining whether a
group qualifies as a religion. See id. We agree with the Comptroller that a group=s external manifestation of
religious practice is not necessarily sufficient, by itself, to confer religious status. However, when coupled
with a belief system that is, at least arguably, concerned with ultimate questions and comprehensive in
nature, such factors swing the balance towards considering a group to be a religion.
In ruling that organizations are not religions, courts often emphasize their lack of certain
practices or characteristics. The organizations held not to be religions in the cases cited by the Comptroller
have lacked many of the features that would have made them more akin to traditional religious practices.
They have lacked life ceremonies, such as naming ceremonies and ceremonial marriage. See Church of
Pan, 507 A.2d at 1363; Church of the Chosen People, 548 F. Supp. at 1253. They have lacked trained
clergy. Mason, 851 F.2d 47, 53; Church of the Chosen People, 548 F. Supp. at 1253, Ideal Life
Church v. County of Washington, 304 N.W.2d 308, 311 (Minn. 1981). Nor have they been able to
demonstrate a coherent and uniform body of literature supporting and elaborating on their religious ideals.
See Mason, 851 F.2d at 53; Church of the Chosen People, 548 F. Supp. at 1253; Church of Pan, 507
22
A.2d at 1363; Ideal Life Church, 304 N.W.2d at 311. Most importantly, some of these organizations
have not even bothered to set up a separate corporate entity and have funneled their funds, which they claim
to have been used for religious purposes, into the private accounts of individuals who have used that money
almost exclusively for personal expenses. E.g., Church of the Chosen People, 548 F. Supp. at 1253;
Ideal Life Church, 304 N.W.2d at 311 (under state tax provisions, subdivision could not declare itself a
religion in order to enjoy tax-exempt status).
By contrast, Ethical Culture has the marks of a traditional religious organization. Indeed,
with a history dating back to 1876, Ethical Culture does appear to function in a way analogous to more
established religious groups. It maintains a bona fide separate corporate existence. It possesses a coherent
literature. Ethical Culture groups meet regularly, typically on Sundays, for services including ceremonial
practices. Those services are led by a group of clergy, most of whom have been educated at theological
institutes and seminaries. The same trained clergy perform life cycle rituals, including marriages and naming
ceremonies. The services are supplemented with religious instruction for children. The Ethical Society of
Austin has such meetings, coordinated by professional clergy, and meets regularly on Sundays. Taken
together, these factors indicate to us a sincere attempt by the Ethical Society, and its sister groups, to
undertake to provide the benefits of a traditional religion. In light of our understanding of the structure of
Ethical Culture=s principles, these external indications of religious faith mark an important factor for
determining whether the Ethical Society is a religion.
Organizations such as the Ethical Society are entitled under the First Amendment to a
careful assessment of their claim to religious status. Such an assessment requires careful analysis of all the
23
factors we have discussed in this opinion. We do not conclude that the Comptroller may never consider
whether an organization espouses a belief in a Supreme Being; such an inquiry may be instructive in
evaluating the types of ideas espoused by a particular applicant group. Instead, we hold that belief in a
supernatural reality must serve, at most, as part of a broader inquiry that investigates both an organization=s
beliefs and the means by which those beliefs are put into action. Ethical Culture=s practices and beliefs, in
our opinion, address ultimate concerns and present a comprehensive belief system. Without question, their
practices and rituals constitute the external signs of a religion. In short, the Ethical Society manifests its
spiritual beliefs through organized observance; we cannot say that this activity falls outside of the scope of
the First Amendment=s protection, and we believe, therefore, that it must fall within the legislature=s intent in
granting the tax exemptions in question. Having held that the Comptroller=s requirement that a group believe
in a Supreme Being, applied as the sole test for determining the grant of religious tax exemptions, violates
the First Amendment, we now hold that, under the Malnak analysis, Ethical Culture qualifies as a religion
for First Amendment purposes.
CONCLUSION
Because we understand the First Amendment to require a broader definition of what should
be considered a religion than the simple Supreme Being litmus test offered by the Comptroller, and because
we believe that under such an analysis Ethical Culture should be so considered, we affirm the trial court=s
judgment.
24
Mack Kidd, Justice
Before Justices Kidd, B. A. Smith and Yeakel
Affirmed
Filed: March 6, 2003
25