In the case of Jimmy Swaggart Ministries v. Board of Equalization of California, 1989, the U.S. Supreme Court ruled that religious materials sold by evangelist Jimmy Swaggart's ministry were subject to sales tax under California law. The court held that imposing a sales and use tax on religious literature did not violate the First Amendment’s Free Exercise Clause or Establishment Clause since it was a generally applicable tax and did not target specific religions or practices. Furthermore, it found no violation in taxing for-profit activities conducted by religious organizations as this does not inhibit their ability to practice religion freely nor does it entangle government excessively with religion. This decision upheld an earlier ruling from the Supreme Court of California which had also determined these taxes constitutional.

In the dissenting opinion for Jimmy Swaggart Ministries v. Board of Equalization of California, Justice Blackmun argued that religious materials and services should be exempt from sales and use taxes under the First Amendment's Free Exercise Clause. He contended that these taxes could potentially burden or inhibit religious practices by making it more expensive for organizations to produce and distribute their materials, thus infringing on their constitutional rights. Furthermore, he expressed concern about potential government entanglement with religion if tax exemptions were determined based on whether an organization's activities were deemed sufficiently religious or not. Therefore, in his view, a blanket exemption was necessary to avoid such issues.