                                                         United States Court of Appeals
                                                                  Fifth Circuit
                                                               F I L E D
                             Revised July 7, 2003
                                                                June 11, 2003
                     UNITED STATES COURT OF APPEALS
                          For the Fifth Circuit     Charles R. Fulbruge III
                                                            Clerk



                                 No. 02-30493



                     AMERICAN CIVIL LIBERTIES UNION
                         FOUNDATION OF LOUISIANA

                                                         Plaintiff-Appellee,


                                     VERSUS


                   CYNTHIA BRIDGES, SECRETARY OF THE
                     LOUISIANA DEPARTMENT OF REVENUE

                                                         Defendant-Appellant.




            Appeal from the United States District Court
                for the Eastern District of Louisiana


Before DeMOSS and STEWART, Circuit Judges, and LITTLE,1 District
Judge.

DeMoss, Circuit Judge:

     Plaintiff-Appellee American Civil Liberties Union Foundation

of Louisiana (the AACLU@) commenced this action in the United

States    District   Court    for   the   Eastern   District      of    Louisiana

against    Brett     Crawford,      predecessor     of   Defendant-Appellant
     1
       District Judge for the United States District Court for
the Western District of Louisiana sitting by designation.
Cynthia Bridges, as Secretary of the Louisiana Department of

Revenue    (the    AState@),       seeking       to    have    several    Louisiana        tax

statutes     declared     unconstitutional              and   to   enjoin    the        State=s

enforcement of these statutes.               Following an interlocutory appeal

on questions of standing and abstention that was dismissed as

improvidently       granted,       the    district        court    signed     a    judgment

stipulated to by the parties making permanent, and therefore

appealable,       the    court=s     earlier           preliminary       injunction        and

declaratory relief which found that the State=s statutes violated

the Establishment        Clause      of    the        First   Amendment.          The    State

appeals, contesting the rulings of the district court on issues

implicating       the   Tax   Injunction         Act,     the   ACLU=s    standing,        and

abstention as well as comity.                    Because we find as a threshold

matter, that jurisdiction was inappropriate, we make no judgment

concerning the issues of standing, abstention, comity, or the

substantive merits of the constitutional challenge.

                                      BACKGROUND

       In 1998, the Louisiana legislature amended and reenacted LA.

REV. STAT. ' 47:301(6) and ' 33:4574.1(A)(1)(b) and enacted LA.

REV. STAT. ' 47:301(8)(d) and (e), and (14)(b)(iv), to exclude

specified    property     owned      by    nonprofit          religious     organizations

from   the   definition       of    Ahotel@      and     Aplaces   of     amusement,@       to

except churches and synagogues from paying sales and use taxes


                                             2
when    purchasing    bibles,   or     literature     used     for   religious

instruction classes, and to define Aperson@ to exclude the Little

Sisters of the Poor relative to particular purchases.                The intent

of the Legislature was to exempt those establishments from paying

state   and   local   sales   and    use   taxes,   provided    that   revenue

generated from the exempted property, or publications acquired,

be used for religious purposes.

       The statutes thus enacted and amended, or enacted anew,

currently read, in pertinent part, as follows:

LA. REV. STAT. ' 47:301(6)(b)

       For purposes of the sales and use taxes of all tax
       authorities in this state, the term Ahotel@ as defined
       herein shall not include camp and retreat facilities
       owned and operated for religious purposes by nonprofit
       religious organizations, which includes recognized
       domestic nonprofit corporations organized for religious
       purposes, provided that the net revenue derived from
       the organization=s property is devoted wholly to
       religious purposes.   For purposes of this Paragraph,
       the term Ahotel@ shall include camp and retreat
       facilities, which sell rooms or other accommodations to
       transient guests.     However, Atransient guest@ for
       purposes of this Paragraph shall not include guests who
       participate in organized religious activities, which
       take place at such camp or retreat facilities. It is
       the intention of the legislature to tax the furnishing
       of rooms to those who merely purchase lodging at such
       facilities.

LA. REV. STAT. ' 47:301(8)(d)

       (i) For purposes of the payment of the state sales and
       use tax and the sales and use tax levied by any
       political subdivision, the term Aperson@ shall not
       include a church or synagogue that is recognized by the
       United States Internal Revenue Service as entitled to
                                       3
     exemption under Section 501(c)(3) of the United States
     Internal Revenue Service Code.

     (ii) The secretary of the Department of Revenue shall
     promulgate rules and regulations defining the terms
     Achurch@ and Asynagogue@ for purposes of this exclusion.
     The definitions shall be consistent with the criteria
     established by the U.S. Internal Revenue Service in
     identifying organizations that qualify for church
     status for federal income tax purposes.

     (iii) No church or synagogue shall claim exemption or
     exclusion from the state sales and use tax or the sales
     and use tax levied by any political subdivision before
     having obtained a certificate of authorization from the
     secretary of the Department of Revenue. The secretary
     shall develop applications for such certificates. The
     certificates shall be issued without charge to the
     institutions that qualify.

     (iv)    The exclusion from the sales and use tax
     authorized by this Subparagraph shall apply only to
     purchases of bibles, song books, or literature used for
     religious instruction classes.

LA. REV. STAT. ' 47:301(8)(e)

     (i) For purposes of the payment of the state sales and
     use tax and the sales and use tax levied by any
     political subdivision, the term Aperson@ shall not
     include the Society of the Little Sisters of the Poor.

     (ii) The secretary of the Department of Revenue shall
     promulgate rules and regulations for purposes of this
     exclusion.   The definitions shall be consistent with
     the criteria established by the U.S. Internal Revenue
     Service in identifying tax-exempt status for federal
     income tax purposes.

     (iii) No member of the Society of the Little Sisters
     of the Poor shall claim exemption or exclusion from the
     state sales and use tax or the sales and use tax levied
     by any political subdivision before having obtained a
     certificate of authorization from the secretary of the
     Department of Revenue.    The secretary shall develop
     applications for such certificates. The certificates
                                4
     shall be issued without charge to the entities which
     qualify.

LA. REV. STAT. ' 47:301(14)(b)(iv)

     For purposes of the sales and use taxes of all tax
     authorities in the state, the term Aplaces of
     amusement@ as used herein shall not include camp and
     retreat facilities owned and operated for religious
     purposes by nonprofit religious organizations, which
     includes recognized domestic nonprofit corporations
     organized for religious purposes, provided that the net
     revenue derived from the organization=s property is
     devoted wholly to religious purposes.

LA. REV. STAT. ' 33:4574.1(A)(1)(b)

     The word Ahotel@ as used herein shall not include camp

     and retreat facilities owned and operated for religious

     purposes by nonprofit religious organizations, which

     includes    recognized        domestic       nonprofit      corporations

     organized for religious purposes, provided that the net

     revenue    derived     from    the       organization=s     property    is

     devoted wholly to religious purposes.

     In 2000, the ACLU filed this suit seeking to have these

statutes    declared   unconstitutional           and    to   enjoin   the   State=s

enforcement     of     these      statutes        through      preliminary        and,

eventually,     permanent      injunctions.             The   Secretary      of   the

Louisiana     Department     of    Revenue        was    named    defendant,      and

thereafter his successor was substituted.

     The State filed a motion to dismiss under Rule 12(b) of the

Federal Rules of Civil Procedure arguing that the Tax Injunction
                                          5
Act prevented the court from hearing the case and the ACLU filed

an opposition.       Following argument, the district court denied the

State=s    motion    and     ordered     the     State    to     file    a    memorandum

addressing     abstention         and    the     sufficiency       of     state     court

remedies; after which the ACLU filed a response.                              Later, the

district court ordered the parties to submit memoranda on the

issue of standing.

     The     district       court    eventually      denied       both       the   State=s

challenge to the ACLU=s standing and the State=s request that the

district court abstain from hearing this case.                            The district

court nevertheless certified both the abstention and standing

issues for interlocutory appeal under ' 1292(b).

     A    panel     of   this    Court   granted      the      State=s    petition    for

permission to appeal those interlocutory orders.                             Thereafter,

however,     the    panel       dismissed       without   prejudice          the   State=s

interlocutory appeal as improvidently granted.

     Then    the     district       court   granted       the    ACLU=s      motion   for

preliminary injunction and declaratory relief.                      The court found

that the statutes violated the Establishment Clause of the First

Amendment.     The parties then entered into a stipulated judgment,

which was signed by the district court, granting a permanent

injunction against the State, with reservation of the right to




                                            6
appeal by both parties on any and all issues stemming from the

court=s ruling on the preliminary injunction.

     The    State   now    appeals,       contesting        the   rulings   of     the

district    court   on    whether       the   court   was    barred    by   the    Tax

Injunction Act from exercising jurisdiction, whether the ACLU has

standing, and whether the district court should have abstained or

whether    principles     of    comity    prevent     the    federal   court      from

deciding the case.        Because, we find that the Tax Injunction Act

of 1937, 28 U.S.C. ' 1341, prevents the federal district court

from hearing this challenge to the State=s tax scheme, we reverse

the district court=s denial of the State=s Rule 12(b) motion to

dismiss and remand the case with instructions for the court to

dismiss for lack of jurisdiction.                Because the district court

lacked jurisdiction, we do not address on appeal any of the other

issues.

                                    DISCUSSION

     Whether the district court was prevented from exercising

jurisdiction over the case because of the Tax Injunction Act is a

question    of   subject       matter    jurisdiction       subject    to   de    novo

review.    Home Builders Ass'n of Miss., Inc. v. City of Madison,

Miss., 143 F.3d 1006, 1010 (5th Cir. 1998) (citation omitted).

The Tax Injunction Act states: "The district courts shall not

enjoin, suspend or restrain the assessment, levy or collection of


                                          7
any tax under State law where a plain, speedy and efficient

remedy may be had in the courts of such State."                                      28 U.S.C. '

1341.       According to the Supreme Court, this statutory text should

be interpreted to advance its purpose of "confin[ing] federal

court intervention in state government . . . ."                                   Ark. v. Farm

Credit      Servs.        of    Cent.       Ark.,       520    U.S.   821,     826-827       (1997)

(citations omitted).               We have stated that the statute Ais meant

to     be    a    broad        jurisdictional           impediment       to     federal      court

interference         with        the   administration            of   state      tax    systems.@

United Gas Pipe Line Co. v. Whitman, 595 F.2d 323, 326 (5th Cir.

1979) (emphasis added).

       ABy its terms, the Act bars anticipatory relief, suits to

stop (>enjoin, suspend or restrain=) the collection of taxes@ and

also        suits        seeking       to      have       state       tax      laws     declared

unconstitutional.               Jefferson County, Ala. v. Acker, 527 U.S. 423,

433 (1999); Cal. v. Grace Brethren Church, 457 U.S. 393, 408

(1982).          ABut a suit to collect a tax is surely not brought to

restrain         state    action,       and    therefore         does    not    fit    the    Act=s

description          of        suits    barred          from    federal        district      court

adjudication.@             Jefferson          County,         Ala.,   527     U.S.     at    433-34

(citation omitted).

       There has never been any dispute among the present parties

concerning          whether       Louisiana         provides      a     Aplain,      speedy     and


                                                    8
efficient remedy,@ but rather the entire dispute has focused on

whether the Tax Injunction Act prevents the federal district

court from deciding a case in which the plaintiff seeks to have

tax Aexemptions,@ which are not specifically enumerated as an

area outside of federal jurisdiction in the language of the Act,

declared unconstitutional.        According to the district court, this

suit involves the collection of a state tax and therefore the

district court found that the Tax Injunction Act did not require

dismissal of the action.           The ACLU argues that this dispute

concerns    tax   exemptions     and   not       the    Aassessment,      levy,   or

collection@ of a tax and therefore the Tax Injunction Act does

not apply.      The State argued in its Rule 12(b) motion to dismiss

and again on appeal that the Tax Injunction Act prevents the

federal district court from exercising jurisdiction over this

case   because    this   case   does   not      involve    the   State    suing   to

collect taxes but rather a challenge to the assessment of state

taxes through the State=s exemption process and any challenge can

be brought in state court.

       We conclude that this case involves a putative taxpayer

seeking to prevent the State from carrying out the current tax

system     by   having   a   portion       of    that     tax    system   declared

unconstitutional; a case that because of the Tax Injunction Act,

cannot be heard in federal district court.                 Our holding is based


                                       9
on three determinations.        First, this is not a suit by the State

to   collect    a    tax.      Second,      assessment   of   exemptions   is

encompassed by the Act.         Third, this Circuit=s precedent and the

purpose of     the   Act    indicate   that   the   federal   district   court

should not have exercised jurisdiction over this case.

     First, the district court erred in holding that this case

involved the collection of a tax and therefore the Tax Injunction

Act did not bar jurisdiction.            Supreme Court and Fifth Circuit

cases where the Tax Injunction Act has been held inapplicable

involved a state, a state subdivision or an agent of a state

seeking to collect a tax from an individual taxpayer or a group

of individual taxpayers, not a plaintiff seeking to have a state

tax law declared unconstitutional.            Jefferson County, Ala., 527

U.S. at 427-28 (involving a county=s attempt to collect taxes

from a group of taxpayers); Appling County v. Mun. Elec. Auth. of

Ga., 621 F.2d 1301, 1303 (5th Cir. 1980) (involving a county

suing a group of taxpayers to collect taxes); Louisiana Land and

Exploration Co. v. Pilot Petroleum Corp., 900 F.2d 816, 818 (5th

Cir. 1990) (involving someone Aacting merely as an agent of the

state for the collection and payment of the tax to the state@

suing to collect a tax).          Further, it is not necessarily true

that declaring the exemptions to be unconstitutional will result

in the State collecting more taxes and therefore this suit is not


                                       10
a de facto suit to collect taxes.                    In fact even as the ACLU

argues, just the opposite could occur, the State may resolve any

putative     constitutional         problems       created    by   the    challenged

statutes by exempting more entities and therefore collecting less

taxes.

           Second,       although    the    ACLU    claims    that     this    dispute

involves     tax    exemptions       and    not     the    Aassessment,       levy   or

collection of any tax,@ a dictionary definition of Aassessment@

indicates exemptions are also within the Act=s jurisdictional

bar.     As ordinarily defined, assessment means Athe entire plan or

scheme fixed upon for charging or taxing.@                    Webster=s Third New

International Dictionary 131 (1981).                 The challenged exemptions

in this case are part of Athe entire plan or scheme fixed upon

for charging or taxing@ in the State of Louisiana.                       Even a more

precise definition of assessment, such as Adetermining the share

of a tax to be paid by each of many persons@ or Athe process of

ascertaining       and    adjusting        the    shares     respectively      to    be

contributed        by    several     persons@      would     include     within      it

exemptions that are granted, like the challenged exemptions, to

organizations so that these organizations do not have to pay the

taxes they would have had to pay but for the exemptions.                       Black=s

Law Dictionary 116-17 (6th Ed. 1990).                      In fact, as the State

points out in its brief, part of the Aassessment@ process is


                                           11
determining whether an individual or organization qualifies for

an    exemption.       Based    on    our    review    of    the    definition       of

assessment, we conclude that this present challenge to exemptions

is within the Act=s jurisdictional bar.

       We realize that our conclusion concerning exemptions as an

area encompassed in the assessment process and therefore within

the Tax Injunction Act=s jurisdictional bar is both consistent

and    inconsistent     with    what    other      circuit     courts     have   held

concerning      challenges     to   state    tax    schemes.       Our    holding    is

consistent with In re Gillis, a decision of the Sixth Circuit

holding that the principles underlining the Tax Injunction Act

prevented the federal district court from addressing an action

brought    by    taxpayers      claiming     that     Kentucky      was    assessing

property taxes at a rate lower than the state should have, even

though the result sought by the plaintiffs would have forced

Kentucky to collect more in taxes.                 836 F.2d 1001, 1005-06 (6th

Cir. 1988).      Our holding is inconsistent with Winn v. Killian, a

decision of the Ninth Circuit holding that the Tax Injunction Act

did not prevent the federal district court from hearing a case

challenging      the   constitutionality        of    tax    credits      granted   to

private schools in Arizona.          307 F.3d 1011, 1020 (9th Cir. 2002).

       In Winn, the Ninth Circuit cited several cases as supporting

its holding that can be distinguished from the present case.                        Two


                                        12
circuit court cases were cited by the Ninth Circuit.            The often

cited Fifth Circuit case of Hargrave v. McKinney, which delved

into the legislative history of the Tax Injunction Act, was cited

to in Winn.     413 F.2d 320, 325-26 (5th Cir. 1969).           Hargrave,

however,   is   inapposite   to   the   present   case   because,   as   the

Hargrave Court noted in its Aexceedingly narrow@ holding, it was

only reversing a district court decision refusing to request that

a three-judge court be convened to address a suit seeking to

compel the full collection and disbursement of county taxes.             Id.

at 326.    The statutory law applicable in Hargrave is not present

in this case.      Likewise, the Seventh Circuit case of Dunn v.

Carey was cited in Winn but is inapplicable to the present case

because Dunn only supports the proposition that taxpayers can use

the federal courts to assert a claim for the collection of taxes

imposed by a federal consent decree and the Tax Injunction Act

does not prevent jurisdiction over such a suit.             808 F.2d 555,

558-59 (7th Cir. 1986).      There is not a federal consent decree at

issue in the present case.2
     2
       Two district court cases were also cited by the Winn court
as supportive of their decision but are equally unpersuasive to
us. Winn cited Moton v. Lambert, in which a district court found
that the Tax Injunction Act did not bar the court from hearing a
civil rights action brought by parents of black children
challenging the constitutionality of certain tax exemptions that
applied to only racially segregated schools. 508 F. Supp. 367,
368 (N.D. Miss. 1981). In the Moton decision, however, there is
very little discussion of the Tax Injunction Act and the case was
not appealed. Id. Winn also cited Rojas v. Fitch, a case in
which a district court allowed jurisdiction in a suit challenging
                                13
       Third, this Circuit has always interpreted the Act broadly.

We have stated:        AThe concept that section 1341 is not a narrow

statute    aimed       only    at      injunctive          interference       with   tax

collection,      but    is    rather     a        broad    restriction    on    federal

jurisdiction in suits that impede state tax administration, has

continued to gain credence in the federal courts.@                        United Gas

Pipe Line Co., 595 F.2d at 326.                   Moreover, this Circuit has held

that   federal     district     courts        were        prohibited   from    deciding

disputes involving tax related concepts or functions similar to

exemptions due to the jurisdictional limitations imposed by the

Tax Injunction Act.           Dawson v. Childs, 665 F.2d 705, 710 (5th

Cir. 1982) (involving the dissolution of tax liens); United Gas

Pipe Line Co., 595 F.2d at 323 (involving the application of tax

refunds); Daytona Beach Racing and Recreational Facilities Dist.

v. Volusia County, 579 F.2d 367, 368 (5th Cir. 1978),(involving

the repealing of tax exemptions).

       In Dawson, this Court held that A[i]n dissolving a lien on

property, a federal court interferes with the state's fiscal



the constitutionality of exempting religious organizations from
unemployment tax. 928 F. Supp. 155, 159-60 (D. R.I. 1996),
affirmed on other grounds, 127 F.3d 184 (1st Cir. 1997). The
Rojas court ultimately upheld the exemption as constitutional.
Id. at 167. However, the First Circuit has since indicated, in
Hardemon v. City of Boston, that the merits should not have been
reached without further inquiry into the jurisdictional question.
144 F.3d 24, 25-26 (1st Cir. 1998).

                                             14
program just as surely as if it enjoined collection or assessment

of the tax itself@ and therefore jurisdiction was inappropriate.

665 F.2d at 710.               In United Gas, this Circuit held that a suit

concerning a tax refund was within the scope of the Act and

therefore could not be heard in federal district court.                           595 F.2d

at    326.         In   Daytona    Beach,    this    Circuit      held     that    the   Tax

Injunction         Act    prevented    the       federal     court      from   exercising

jurisdiction over a case where a taxpayer was challenging the

actions of a state legislature in repealing a previously granted

tax exemption.            579 F.2d at 369.          Although our analysis focused

on whether a state remedy was available, we assumed the Tax

Injunction Act was a jurisdictional bar to hearing a challenge to

the repealing of state tax exemptions.                           Id.      Therefore, the

precedent      of       this   Circuit,     which    is    in    accordance       with   the

purpose       of    the    Act,    dictates       that     the    Tax     Injunction     Act

prohibits the district court from hearing this case.

       However, this does not mean the ACLU is left with no other

recourse.          For example, after a review of the history of the Act

we noted in Bland v. McHann that, AWe are convinced that both

long standing policy and congressional restriction of federal

jurisdiction in cases involving state tax administration make it

the    duty    of       federal   courts    to    withhold       relief    when    a   state

legislature has provided an adequate scheme whereby a taxpayer


                                             15
may maintain a suit to challenge a state tax.    The taxpayer may

assert his federal rights in the state courts and secure a review

by the Supreme Court.@   463 F.2d 21, 24 (5th Cir. 1972).   That is

precisely what the Tax Injunction Act requires the ACLU to do,

i.e., first challenge the Louisiana statutes in Louisiana and if

need be secure review by the Supreme Court.

                            CONCLUSION

Having carefully reviewed the record of this case, the parties=

respective briefing and arguments, and for the reasons set forth

above, we reverse the decision of the district court and remand

the case with instructions for the district court to dismiss for

lack of jurisdiction under the Tax Injunction Act.

REVERSED AND REMANDED




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