The U.S. Supreme Court case Texas Monthly, Inc. v. Bullock involved a dispute over whether the state of Texas could exempt religious publications from sales tax without violating the Establishment Clause of the First Amendment, which prohibits government endorsement or support for any particular religion. The plaintiff, Texas Monthly magazine, argued that this exemption constituted state sponsorship of religion and was therefore unconstitutional. In 1988, the Supreme Court ruled in favor of Texas Monthly by a vote of six to three; it held that providing tax exemptions exclusively to religious publications amounted to an unconstitutional subsidy for religious groups at taxpayers' expense and violated principles of church-state separation enshrined in the Constitution's Establishment Clause.

In the dissenting opinion for Texas Monthly, Inc. v. Bullock, Justice Scalia argued that the tax exemption on religious publications did not violate the Establishment Clause of the First Amendment. He contended that this was a permissible accommodation of religion rather than an endorsement or sponsorship by government. The majority's view would require taxing churches and other non-profit organizations which he believed to be contrary to historical practice and precedent in America. Furthermore, he disagreed with their interpretation of "neutrality" towards religion as requiring equal treatment between secular and religious entities; instead arguing it should mean refraining from hostility towards religion.