Arizona Christian School Tuition Organization v. Winn

Litigation: Litigation: Challenging Arizona’s “Original Individual Income Tax Credit Scholarships” law, the nation’s first tax credit scholarship program, enacted in 1997. An earlier case, Kotterman v. Killian, was rejected for review by the U.S. Supreme Court. This case, challenging that the program violated the Establishment Clause of the First Amendment to the federal constitution, was accepted. Opposed to educational choice program : American Association of School Administrators, American Ethical Union, American Humanist Association, American Jewish Committee, Americans United for Separation of Church and State, Anti-Defamation League, Arizona Education Association, Arizona School Boards Association, Atheist Alliance International, Baptist Joint Committee for Religious Liberty, Center for Inquiry, Council for Secular Humanism, Freedom From Religion Foundation, Institute for Humanist Studies, Interfaith Alliance Foundation, National Education Association, National School Boards Association, Secular Coalition for America, Secular Student Alliance, Society for Humanistic Judaism, Unitarian Universalist Association. In support: Advocates for Faith and Freedom, Agudath Israel of America, American Center for Law and Justice, American Center for School Choice, Association for Biblical Higher Education, Association of Christian Schools International, Becket Fund for Religious Liberty, Black Alliance for Educational Options, Catholic Tuition Organization of the Diocese of Phoenix, Catholic Tuition Support Organization of the Diocese of Tucson, Cato Institute, Center for Arizona Policy, Center for Constitutional Jurisprudence, Christian Educators Association International, Christian Legal Society, Convocation of Anglicans in North America, Council of Christian Colleges & Universities, Ethics and Religious Liberty Commission of the Southern Baptist Convention, Florida Assoc. Of Academic Nonpublic Schools, Florida School Choice Fund, Foundation for Excellence in Education, Friedman Foundation for Educational Choice, Goldwater Institute, Hispanic Council for Reform and Educational Options, Indiana and 12 states (AL, CO, FL, GA, LA, MI, MS, PA, SC, TX, UT, WA), Jewish Tuition Organization, Justice and Freedom Fund, Liberty Counsel and American Association of Christian Schools, Lutheran Education Foundation, National Assoc. Of Evangelicals, New Way Learning Academy, Pacific Legal Foundation, Rutherford Institute, Union of Orthodox Jewish Congregations of America, United States, U.S. Conference of Catholic Bishops, U.S. Representative Trent Franks.

Outcomes: On April 4, 2011, the U.S. Supreme Court, in a landmark decision, upheld Arizona’s personal tax-credit scholarships, ruling that taxpayers do not have standing under the U.S. Constitution’s First Amendment Establishment Clause to challenge a tax-credit scholarship program. The court rejected opponents’ position that personal income is government property, declaring: “Respondents’ contrary position assumes that income should be treated as if it were government property even if it has not come into the tax collector’s hands. That premise finds no basis in standing jurisprudence. Private bank accounts cannot be equated with the Arizona State Treasury.”

Why it Matters: This opinion placed tax credit scholarship programs in a favorable position to fend off litigation at the state level. It clearly explained that since funding for the scholarships comes from the voluntary action of private donors, tax credit programs are private, not state, programs. Furthermore, the court was clear that tax credits are a reduction in tax owed to the state; they are not appropriations of funds taken from a state’s treasury.

Effects: Arizona has four tax credit scholarship programs, enacted in 1997, 2006, 2009, and 2012. Over 70,000 scholarships are awarded each year. Also, since this U.S. Supreme Court ruling in 2011, only one state supreme court has ruled a tax credit scholarship program to be unconstitutional. That case, Espinoza v. Montana Dept of Revenue, was overturned by the U.S. Supreme Court in a 2020 landmark ruling.

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