Plaintiffs asserted an Establishment Clause challenge to an Arizona statute allowing residents to direct part of their tax payments to organizations that provide scholarships to students. An overwhelming majority of these payments are directed toward religious organizations that support students who attend religious schools. Upon the defendants’ motions, the federal district court dismissed the case for failure to state a claim and for lack of subject matter jurisdiction (based on its determination that the plaintiffs lacked standing to raise the Establishment Clause claim). Plaintiffs appealed to the U.S. Court of Appeals for the Ninth Circuit, which reversed the dismissal and remanded the case to the district court. The defendants, on February 18, 2010, filed a petition for a writ of certiorari with the U.S. Supreme Court, which the Court granted.
Americans United, together with various other organizations, filed an amicus brief in support of the plaintiffs on September 22, 2010. In sum, the brief argues that, for purposes of standing, there is no functional difference between tax expenditures (including tax credits) and cash grants because the two have virtually identical economic effects. Distinguishing between tax and cash expenditures would call into question numerous cases in which the Court addressed the merits of Establishment Clause challenges to tax credits and tax deductions without raising any questions about the taxpayers’ standing. The brief also stresses that the limits that apply to federal-taxpayer standing should not apply to state-taxpayer standing because of the vast differences between the taxing-and-spending regimes of the federal and state constitutions.