In the case of J. Elliott Hibbs, Director, Arizona Department of Revenue v. Kathleen M. Winn et al., 2003, the Supreme Court was asked to consider whether a tax credit offered by the state of Arizona violated the Establishment Clause of First Amendment because it allowed taxpayers to claim credits for donations made to school tuition organizations that provided scholarships for religious schools. The plaintiffs argued that this amounted to government support for religion and thus breached constitutional principles separating church and state. The court ruled in favor of Hibbs (the director), finding no violation had occurred as there was no direct funding from government coffers towards religious institutions; instead private citizens were making choices about their own funds due to a generally available tax benefit scheme which did not favour any particular religion or even religious schooling over secular education.

In the dissenting opinion for Hibbs v. Winn, Justice Scalia argued that the tax credit offered by Arizona did not violate the Establishment Clause of the First Amendment because it was a neutral law that allowed taxpayers to direct their own funds towards religious or secular schools based on personal choice. He asserted that this case should be dismissed due to lack of standing since plaintiffs failed to demonstrate any concrete injury as required under Article III of Constitution. Furthermore, he contended that allowing such suits would open up floodgates for challenges against all sorts of state and federal expenditures which indirectly benefit religion in some way - an outcome he believed is contrary to historical practice and precedent.