## Facts

- Montana enacted a tax-credit scholarship program granting donors a dollar-for-dollar state income tax credit (up to $150) for contributions to nonprofit scholarship organizations.
- Scholarship organizations awarded scholarships to students to attend private schools.
- Montana’s Constitution included a “no-aid” provision barring direct or indirect aid to religiously affiliated schools.
- The Montana Department of Revenue adopted an administrative rule prohibiting scholarship funds from being used at religious schools.
- Several parents sought scholarships to keep their children in a Christian school and challenged the rule.
- A state trial court invalidated the administrative rule while leaving the scholarship program in place.
- The Montana Supreme Court struck down the entire scholarship program, reasoning that permitting scholarship use at religious schools violated the state no-aid provision.

## Issues

1. Whether applying a state no-aid provision to exclude religious schools from an otherwise neutral and generally available tax-credit scholarship program violates the Free Exercise Clause.
2. Whether a state may avoid a Free Exercise violation by invalidating the entire aid program after it is challenged as discriminatory.
3. What level of constitutional scrutiny applies to a state’s exclusion of religious schools from a public benefit program based on religious status.

## Decision

- The U.S. Supreme Court reversed the Montana Supreme Court in a 5–4 decision.
- The Court held that applying the state no-aid provision to bar participation by religious schools and families in the scholarship program constituted unconstitutional discrimination based on religious status.
- The Court concluded the exclusion triggered strict scrutiny and that Montana’s asserted interest in greater church–state separation did not justify the discrimination.
- The Court rejected the argument that terminating the entire program cured the constitutional injury where the program was invalidated because it allowed aid to religious schools.

## Legal Principles

- The Free Exercise Clause prohibits a state from denying an otherwise available public benefit solely because of an applicant’s religious character.
- Once a state chooses to subsidize private education, it may not disqualify otherwise eligible private schools from the benefit on the basis of religious status.
- Status-based exclusions from neutral benefit programs trigger strict scrutiny and require a compelling justification and narrow tailoring.
- A state cannot nullify a benefit program as a means of preserving a discriminatory exclusion from judicial review when the program was terminated for reasons tied to religious disqualification.

## Conclusion

The Court held that Montana’s use of its no-aid provision to bar religious schools from a neutral tax-credit scholarship program violated the Free Exercise Clause, and that eliminating the entire program did not eliminate the constitutional problem when the program was struck down because it included religious options.


Espinoza v. Mont. Dep’t of Revenue, 591 U.S. 464 (2020)