Bob Jones University v. United States

In Bob Jones University v. United States (1983) 461 U.S. 574, the federal Supreme Court dealt with a nondiscrimination condition which had been attached to the federal tax law requirement of charitable status, allowing favorable tax treatment of nonprofit foundations. A university contended its First Amendment right to freedom of religion had been violated by this condition, requiring it to cease discriminating in order to receive the subsidy of favorable tax status. The federal Supreme Court rejected this argument, observing that denial of a tax subsidy did not violate any First Amendment rights, because the university remained free to observe its own religious principles in favor of discrimination, albeit without a subsidy: "Denial of tax benefits will inevitably have a substantial impact on the operation of private religious schools, but will not prevent those schools from observing their religious tenets." (Ibid.)