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Pepperdine University School of Law

Friday, May 3, 2013

Willis: Taxes and Religion -- The Hobby Lobby Contraceptive Cases

Hobby-lobbySteven J. Willis (Florida), Taxes and Religion: The Hobby Lobby Contraceptive Cases:

Beginning in 2013, the federal government mandates that general business corporations include contraceptive and early abortion coverage in employee health plans. Internal Revenue Code Section 4980D imposes a substantial excise tax on health plans violating the mandate. Indeed, for one company – Hobby Lobby – the expected annual tax is nearly one-half billion dollars. Dozens of “for profit” businesses have challenged the mandate on free exercise grounds, asserting claims under the First Amendment as well as under the Religious Freedom Restoration Act.

So far, courts have been reluctant to hold corporations have religious rights of their own; as a result, standing of a corporation to assert the religious beliefs and rights of owners has become the primary issue in the twenty-six separate cases moving through the courts. Courts are split on whether to grant standing; however, a large majority has used a variation of relational or associational standing to grant preliminary injunctions against enforcement of the tax.

This article discusses the relationship of morality and religion to general business corporations. It concludes that over the past few decades, movements for social justice and corporate social responsibility have intertwined business corporations and moral issues, blurring the line between religion and commerce. It also concludes that courts should permit associational standing for closely-held corporations – particularly those electing S status for tax purposes – if the owners have unanimous (or near-unanimous) beliefs.

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How far will owner moral opposition take us? What of antivivisectionists or those opposed to in vivo experimentation on animals? If a business owner has such moral objections, should that individual be able to object to paying for any procedures or medicines that were developed employing procedures that involved animal testing or experimentation that violated the owner's moral principles?

Why does our discussion always focus on issues that involve sexual morality and ignore others? Is our vision that narrow or our obsession so great?

Posted by: Bill Turnier | May 3, 2013 4:41:20 PM