author:
Justice O’Connor
      Justice White,

text:
    WESTERN AIR LINES, INC., et al. v. BOARD OF EQUALIZATION OF THE STATE OF SOUTH DAKOTA et al.
    No. 85-732.
    Argued November 3, 1986
    Decided February 24, 1987

      O’Connor, J., delivered the opinion for a unanimous Court. White, J., filed a concurring opinion, post, p. 135.

      Raymond J. Rasenberger argued the cause for appellants. With him on the briefs were Rachel B. Trinder and C. West-brook Murphy.

      Mark V. Meierhenry, Attorney General of South Dakota, argued the cause for appellees. With him on the brief was John Dewell, Assistant Attorney General.

         James E. Landry filed a brief for the Air Transport Association of America as amicus curiae urging reversal.

        James W. McBride and Gregory G. Fletcher filed a brief for the Railway Progress Institute et al. as amid curiae.

   Justice O’Connor

delivered the opinion of the Court.

In this case we consider whether the South Dakota Airline Flight Property Tax, S. D. Codified Laws, ch. 10-29 (1982), violates the Airport and Airway Improvement Act of 1982, 49 U. S. C. App. § 1513(d). We conclude that because the South Dakota Airline Flight Property Tax is an “in lieu tax which is wholly utilized for airport and aeronautical purposes,” 49 U. S. C. App. § 1513(d)(3), the tax does not violate § 1513(d).

I

The federal provision at issue is part of a series of congressional actions dedicated to improving the Nation’s air transportation system. Aloha Airlines, Inc. v. Director of Taxation, 464 U. S. 7, 8-10 (1983). In 1970, following findings that “substantial expansion and improvement of the airport and airway system is [sic] required to meet the demands of interstate commerce, the postal service, and the national defense,” H. R. Conf. Rep. No. 91-1074, p. 29 (1970), Congress required the Secretary of Transportation to prepare a plan for the development of public airports, and authorized the Secretary to make grants to States and localities for airport development. Airport and Airway Development Act of 1970, Pub. L. 91-258, 84 Stat. 219. Congress also established an Airport and Airway Trust Fund, maintained by federal aviation taxes, to finance airport development projects. §208, 84 Stat. 250. Soon afterward, Congress acted to limit state taxation of air transportation. Concluding that state passenger use taxes placed “an unnecessary burden on interstate commerce,” and had “a stifling effect on air transportation,” H. R. Rep. No. 93-157, p. 4 (1973), Congress prohibited such taxes in the Airport Development Acceleration Act of 1973, Pub. L. 93-44, §7(a), 87 Stat. 90.

In the Airport and Airway Improvement Act of 1982, 96 Stat. 701, Congress added a §7(d) to the Airway Development Acceleration Act of 1973, prohibiting the imposition of discriminatory property taxes on air carriers. That prohibition, as codified at 49 U. S. C. App. § 1513(d), reads:

“(d) Acts which unreasonably burden and discriminate against interstate commerce; definitions
“(1) The following acts unreasonably burden and discriminate against interstate commerce and a State, subdivision of a State, or authority acting for a State or subdivision of a State may not do any of them:
“(A) assess air carrier transportation property at a value that has a higher ratio to the true market value of the air carrier transportation property than the ratio that the assessed value of other commercial and industrial property of the same type in the same assessment jurisdiction has to the true market value of the other commercial and industrial property;
“(B) levy or collect a tax on an assessment that may not be made under subparagraph (A) of this paragraph; or
“(C) levy or collect an ad valorem property tax on air carrier transportation property at a tax rate that exceeds the tax rate applicable to commercial and industrial property in the same assessment jurisdiction.
“(2) In this subsection—
“(D) ‘commercial and industrial property’ means property, other than transportation property and land used primarily for agricultural purposes or timber growing, devoted to commercial and industrial use and subject to a property tax levy; . . .
“(3) This subsection shall not apply to any in lieu tax which is wholly utilized for airport and aeronautical purposes.”

The South Dakota Airline Flight Property Tax, which appellants allege violates § 1513(d), was enacted in 1961. Flight property is defined as “all aircraft fully equipped ready for flight used in air commerce.” S. D. Codified Laws § 10-29-1(4) (1982). The portion of the value of flight property subject to the tax is based on flight tonnage, flight time, and revenue ton miles, § 10-29-10, and this value is taxed at the “average mill rate,” § 10-29-14. The statute also provides that “[t]he taxes imposed by this chapter shall be allocated by the secretary of revenue to the airports where such airlines companies make regularly scheduled landings and shall be used exclusively by such airports for airport purposes . . . .” §10-29-15.

The South Dakota statute provides that “[fjlight property of airline companies operating in the state shall be assessed for the purpose of taxation by the department of revenue and not otherwise,” § 10-29-2. Airline flight property is 1 of 10 specific categories of property that are centrally assessed for purposes of taxation. (The other categories are certain property of railroads, private car-line companies, express companies, telephone companies, telegraph companies, electric, heating, water and gas companies, rural electric companies, rural water supply companies, and pipeline companies. See S. D. Codified Laws chs. 10-28 through 10-37.) Each of these categories was an exception from the general South Dakota scheme of local property tax assessment a1 the county level. S. D. Codified Laws § 10-3-16 (1982). In 1978, South Dakota exempted from ad valorem taxation all personal property that was locally rather than centrally assessed, §10-4-6.1.

In May 1983, appellants, four airline companies operating in South Dakota, paid their flight property taxes for the first six months of 1983 under protest. Appellants then sued the appropriate county treasurers for a refund. Appellants alleged that, because airline flight property was subject to taxation while most other personal property was exempt, the South Dakota flight property tax violated §§ 1513(d)(1)(A) and (C). In each case the county answered that the state flight property tax was “utilized wholly for airport and aeronautical purposes and is in lieu of property taxes and is therefore permitted by 49 U. S. C. [App. §] 1513(d)(3).” App. 10-11. Following an unsuccessful request to seven county boards of commissioners to abate and refund flight property taxes paid after the effective date of the Airport and Airway Improvement Act of 1982, appellants sued the county commissions for abatement and refund. App. 17. Finally, appellants appealed the property tax assessment to the South Dakota State Board of Equalization. The Board of Equalization unanimously denied the appeal, holding that “the airline flight property tax is in lieu of personal property tax and is totally utilized for airport and aeronautical purposes, therefore, in conformity with Section [1513](d)(3), this tax is lawful and not a violation of Federal law.” Id., at 31. All the lawsuits described above were consolidated in the Circuit Court for the Sixth Judicial Circuit in Hughes County, South Dakota. That court agreed with the counties and the Board of Equalization that the flight property tax was permitted under § 1513(d)(3). App. to Juris. Statement 19a-21a.

On appeal, the Supreme Court of South Dakota disagreed with the conclusion that the flight property tax was authorized under § 1513(d). 372 N. W. 2d 106 (1985). In order to be an “in lieu tax,” the court reasoned, the flight property tax must be a substitute for another tax on flight property. “In the case at bar, however, the tax is not a substitute for an ad valorem personal property tax. It is in fact the first imposition of personal property tax on the airline flight property.” Id., at 109. The State Supreme Court affirmed the Circuit Court, however, on an alternative ground. Under §§ 1513(d)(1)(A) and (C), the discriminatory nature of assessment ratios or tax rates applied to airline property is determined by comparison to the ratios and rates applied to other “commercial and industrial property.” “Commercial and industrial property” is defined as “property, other than transportation property and land used primarily for agricultural purposes or timber growing, devoted to commercial and industrial use and subject to a property tax levy. ” § 1513(d)(2)(D) (emphasis supplied). Because locally assessed personal property was not subject to a property tax levy, the State Supreme Court concluded that such property “cannot be included as commercial or industrial property for comparison under either” §§ 1513(d)(1)(A) or (C). 372 N. W. 2d, at 110. Because appellants’ claims under § 1513(d) were based on a comparison between flight property and property no longer subject to a tax levy, the court concluded that the claims must be rejected.

South Dakota Supreme Court Justice Henderson concurred in the court’s interpretation of the “in lieu tax” provision, but dissented from the court’s interpretation of “ ‘commercial and industrial property.’” The State Supreme Court holding, Justice Henderson observed, permitted “-‘greater discrimination when the [commercial and industrial] property is completely exempt than when it is taxed, but at a lower rate.’” Id., at 112, quoting Northwest Airlines v. State Board of Equalization, 358 N. W. 2d 515, 517 (1984). Such an interpretation of the federal antidiscrimination provisions was unreasonable, Justice Henderson concluded. “Since the level of assessment on commercial and industrial personal property is zero, the level of assessment of the airlines’ personal property must be reduced to zero.” 372 N. W. 2d, at 112.

In their jurisdictional statement to this Court appellants challenged the Supreme Court of South Dakota’s interpretation of “commercial and industrial property” under § 1513(d). Appellees defended the judgment on the basis of the same reasoning used by the Supreme Court of South Dakota. We noted probable jurisdiction, 475 U. S. 1008 (1986). Following oral argument, we requested supplemental briefing from the parties, and called for the views of the United States, on the following questions: (1) Is the question whether a state tax is an “in lieu tax which is wholly utilized for airport and aeronautical purposes,” one of state or federal law, and “(2) If federal law governs the question whether a tax is an in lieu tax under § 1513(d)(3), is the South Dakota Airline Flight Property Tax ... an ‘in lieu tax’ under § 1513(d)(3)?” 479 U. S. 958 (1986). Because our conclusions on these two questions resolve this case, we do not reach the question of the interpretation of “commercial and industrial property” under § 1513(d).

II

The parties and the United States agree that the question whether a state tax is an “in lieu tax which is wholly utilized for airport and aeronautical purposes,” under § 1513 (d)(3), is ultimately one of federal law. The general principle that, absent a clear indication to the contrary, the meaning of words in a federal statute is a question of federal law has especial force when the purpose of the federal statute is to eliminate discriminatory state treatment of interstate commerce. Indeed, in Aloha Airlines, Inc. v. Director of Taxation, 464 U. S., at 13-14, this Court held that a state legislature’s characterization of a tax could not shield the tax from application of another subsection of §1513. In the present case, as in Aloha Airlines, supra, we must examine the “purpose and effect” of the state tax in light of the policy embodied in the federal provision.

Congress has given us little material with which to interpret the in lieu tax exception. The provision was added to the Act at conference, and there is no legislative history specifically discussing it. The language of § 1513(d)(3) itself, and the policies reflected in the Airport and Airway Improvement Act of 1982, however, lead us to the conclusion that the in lieu tax provision exempts the South Dakota Airline Flight Property Tax from the restrictions of § 1513(d).

Section 1513(d)(3) uses two characteristics to identify a group of airline property taxes that are exempted from the restrictions of § 1513(d)(1). First, and perhaps most important, to fall under the protection of § 1513(d)(3) a tax must be “wholly utilized for airport and aeronautical purposes.” Section 1513(d) is modeled on similar provisions in the 4-R Act and the Motor Carrier Act of 1980. See 49 U. S. C. §§ 11503, 11503a. The legislative history of the antidiscrimi-nation provision in the 4-R Act demonstrates Congress’ awareness that interstate carriers “are easy prey for State and local tax assessors” in that they are “nonvoting, often nonresident, targets for local taxation,” who cannot easily remove themselves from the locality. S. Rep. No. 91-630, p. 3 (1969). The Department of Transportation had observed that “[s]tate and local governments derive substantial revenues from taxes on property owned by common carriers. ” Id., at 4. It is this temptation to excessively tax nonvoting, nonresident businesses in order to subsidize general welfare services for state residents that made federal legislation in this area necessary. The ability to use taxes levied on an interstate carrier to subsidize general welfare spending does not exist, of course, when the proceeds are allocated directly and entirely to the benefit of the carrier. Not only is the possibility of discriminatory benefits to state residents eliminated, but also the specter of discriminatory burdens on the carrier is avoided by the recycling of the tax revenues into the specific facilities used by the carrier.

Second, the phrase “in lieu tax” restricts the protection of § 1513(d)(3) to property taxes applied to the exclusion of any other tax on the property, in other words, to taxes applied in lieu of any other possible property tax. This requirement reinforces the policy reflected in the “wholly utilized for airport and aeronautical purposes” phrase. If the revenues collected pursuant to a property tax are specifically used for the benefit of those from whom the tax was collected, then, as explained above, the tax does not discriminatorily take from some in order to benefit others. If the same property is also subjected to tax used to subsidize general state expenditures, however, then the potential for abuse remains. Two individually nondiscriminatory taxes — a tax used for general welfare spending that meets the assessment ratio and rate restrictions of § 1513(d)(1), and a tax the proceeds of which are devoted entirely to the industry from which it is collected — obviously can become discriminatorily burdensome when combined.

South Dakota levies a tax on airline flight property, the proceeds of which are wholly utilized for airport and aeronautical purposes. See S. D. Codified Laws § 10-29-15 (1982), quoted supra, at 126. The South Dakota Airline Flight Property Tax establishes a method of taxing a particular type of property to the exclusion of any other tax on that property. It therefore stands in lieu of the generally applicable ad valorem property tax that had been assessed on most other commercial and industrial property in the State at the time the airline flight property tax was established. The language and logic of § 1513(d)(3), therefore, lead to the conclusion that the South Dakota Airline Flight Property Tax falls under the in lieu tax exemption.

Appellants argue, however, that these characteristics alone are not sufficient for a tax to be exempted by § 1513(d)(3). Appellants advocate the position taken by the Supreme Court of South Dakota, that in order to be exempted under this provision a tax must take the place of another tax that historically had been applied to the airline property. The fact that a property tax is applied to the exclusion of all other property taxes is immaterial, appellants assert, unless some past tax was actually replaced by the present tax. Because South Dakota’s taxation of airline flight property has always taken the form of the taxation scheme at issue in this case, appellants argue, the South Dakota Airline Flight Property Tax is not a true “in lieu tax.”

Admittedly the phrase “in lieu tax” is open to this interpretation. The illogical results of applying such an interpretation, however, argue strongly against the conclusion that Congress intended these results when it drafted § 1513(d)(3).

Under the interpretation appellants advocate, the question whether a tax would be exempted under the in lieu tax provision would, at best, turn on historical fortuity. The identical taxation scheme South Dakota utilizes would be exempted under § 1513(d)(3) if South Dakota had at one time applied some other taxation scheme to airline flight property. Thus, if at one time the proceeds of the airline flight property tax had gone to general state expenditures rather than directly to the benefit of airports and airlines, the present tax would be exempted. Because South Dakota has always chosen to devote its taxes on airline flight property solely to the benefit of those airlines, it is not exempted, according to appellants. Why a State that has consistently chosen to levy, to the exclusion of all other property taxes, a tax utilized wholly for aeronautical purposes should be penalized for its consistency is unexplained.

At worst, appellants’ interpretation of § 1513(d)(3) would do no more than place a meaningless hurdle before state legislatures seeking to conform their tax scheme to the requirements of this provision. A closer examination of how this proposed replacement requirement would operate in practice illustrates the point. Appellants do not suggest— and have no basis upon which to suggest — that in order to be an “in lieu tax” under § 1513(d)(3) the airline flight property tax must have replaced some other tax by the effective date of the federal provision. If one tax must replace another, therefore, the replacement could take place at any time. Moreover, it could not be a condition of § 1513(d)(3) coverage that the “in lieu tax” replace a tax that had met the antidis-crimination restrictions of § 1513(d). If the tax described in § 1513(d)(3) could replace only a tax that met all the requirements of § 1513(d)(1), then § 1513(d)(3) would not be an exemption at all; it would simply add a restriction on how the taxes could be spent with no corresponding latitude on how they may be collected. Ultimately, therefore, South Dakota could satisfy appellants’ interpretation of § 1513(d)(3) by simply amending its tax code so that its airline flight property tax took some other form, then the following session substituting for that tax a tax utilized wholly for aeronautical purposes. This exercise of replacing one tax with another, while contributing somewhat to a state legislature’s workload, would contribute nothing to the policies of the Airport and Airway Improvement Act.

In sum, the language of § 1513(d)(3), while at first glance ambiguous, should be interpreted in a manner that comports with the policies of the Airport and Airway Improvement Act. That interpretation is that § 1513(d)(3) exempts from the antidiscrimination provisions of § 1513(d)(1) a tax on airline flight property, applied to the exclusion of any other possible tax on that property, the proceeds of which are wholly utilized for airport and aeronautical purposes. Because the South Dakota Airline Flight Property Tax fits this description, it does not violate the antidiscrimination provisions of § 1513(d). For this reason, the judgment of the Supreme Court of South Dakota is

Affirmed.

Justice White,

concurring.

Neither in responding to appellants’ jurisdictional statement nor in their brief on the merits did appellees defend the airlines tax as an in-lieu tax; and as my dissenting vote indicated, I thought it inappropriate to call for further briefing and sua sponte pose the in-lieu issue rather than to address what I thought to be the plainly improvident ground on which the South Dakota Supreme Court sustained the tax. But the Court’s action is surely within its power, for the in-lieu issue was raised and decided in the South Dakota courts. That question is now before us, and the Court having correctly decided it, I join its opinion.

      The United States and appellants have directed our attention to a 1975 Report of the House Committee on Interstate and Foreign Commerce on H. R. 10979, the Railroad Revitalization and Regulatory Reform Act of 1976 (4-R Act). As we note infra, at 131, the antidiscrimination provisions of 49 U. S. C. App. § 1513(d) were modeled on a similar provision in the 4-R Act. This Report used the phrase “in lieu tax” to describe special taxes on common carriers that operate differently from the generally applicable property tax schemes. H. R. Rep. No. 94-725, pp. 77, 78 (1975). The House Report seems to have used the phrase “in lieu tax” to describe a broad range of taxes. This sliver of legislative history supports our interpretation of the phrase, see infra, at 131-132.
      Appellants submit an affidavit of John L. Zoraek, an attorney who “rep-resentes] clients in a variety of legislative matters before the United States Congress.” App. to Supplemental Brief for Appellants in No. 14560 (Sup. Ct. S. D.) B-l, B-2. Affiant Zoraek states that he was “involved” — in an unexplained capacity — in the passage of the legislation that ultimately became § 1513(d). According to affiant Zoraek, the “in lieu” provision “was intended to ensure that the Act would not invalidate state taxes which are a legitimate substitute for other taxes on air carrier transportation property and which are not imposed in an effort to tax such property at rates higher than those imposed on other comparable commercial and industrial property.” This would be an incongruous justification for the “in lieu” provision, however, since airline property taxes that are not imposed at rates higher than those imposed on other comparable commercial and industrial property are not threatened by the antidiscrimination provisions of § 1513(d). Mr. Zoraek adds that the in lieu provision “was inserted to take care of Minnesota’s objection to an earlier version.” “To my knowledge no other state made any representation at the time that it wished to be protected by the in lieu provision,” Mr. Zorack concludes. Id., at B-2, B-3. On the basis of this affidavit, appellants argue that to be covered by the in lieu provision a state tax must resemble the Minnesota airflight property tax, which was a substitute for other property taxes previously imposed on airlines. As we note, infra, at 133, the interpretation of an “in lieu tax” as a tax that actually replaced a tax previously imposed is admittedly a possible one. Appellants’ attempt at the creation of legislative history through the post hoc statements of interested onlookers is entitled to no weight, however.


source: Caselaw Access Project

author: Justice Brennan Chief Justice Rehnquist, Justice Powell, Justice Stevens,

license: Public Domain

text:
    HOBBIE v. UNEMPLOYMENT APPEALS COMMISSION OF FLORIDA et al.
    No. 85-993.
    Argued December 10, 1986
    Decided February 25, 1987

      Brennan, J., delivered the opinion of the Court, in which White, Marshall, Blackmun, O’Connor, and Scalia, JJ., joined. Powell, J., post, p. 146, and Stevens, J., post, p. 147, filed opinions concurring in the judgment. Rehnquist, C. J., filed a dissenting statement, post, p. 146.

      Walter E. Carson argued the cause for appellant. With him on the briefs were Mitchell A. Tyner and Frank M. Palmour.

      John D. Maher argued the cause and filed a brief for appel-lee Unemployment Appeals Commission.

      Briefs of amici curiae urging reversal were filed for The American Jewish Congress et al. by Ronald A. Krauss, Marc D. Stem, and Jack D. Novik; for the Baptist Joint Committee on Public Affairs et al. by Donald R. Brewer; for the Catholic League for Religious and Civil Rights by Steven Frederick McDowell; for the Council on Religious Freedom by Lee Boothby, James M. Parker, and Robert W. Nixon; and for the Rutherford Institute et al. by W. Charles Bundren, James J. Knicely, Alfred J. Lindh, and William B. Hollberg.

        Solicitor General Fried, Assistant Attorney General Reynolds, Deputy Solicitor General Ayer, Deputy Assistant Attorney General Carvin, and Roger Clegg filed a brief for the United States as amicus curiae.

   Justice Brennan

delivered the opinion of the Court.

Appellant’s employer discharged her when she refused to work certain scheduled hours because of sincerely held religious convictions adopted after beginning employment. The question to be decided is whether Florida’s denial of unemployment compensation benefits to appellant violates the Free Exercise Clause of the First Amendment of the Constitution, as applied to the States through the Fourteenth Amendment.

h-l

Lawton and Company (Lawton), a Florida jeweler, hired appellant Paula Hobbie in October 1981. She was employed by Lawton for 214 years, first as a trainee and then as assistant manager of a retail jewelry store. In April 1984, Hobbie informed her immediate supervisor that she was to be baptized into the Seventh-day Adventist Church and that, for religious reasons, she would no longer be able to work on her Sabbath, from sundown on Friday to sundown on Saturday. The supervisor devised an arrangement with Hobbie: she agreed to work evenings and Sundays, and he agreed to substitute for her whenever she was scheduled to work on a Friday evening or a Saturday.

This arrangement continued until the general manager of Lawton learned of it in June 1984. At that time, after a meeting with Hobbie and her minister, the general manager informed appellant that she could either work her scheduled shifts or submit her resignation to the company. When Hobbie refused to do either, Lawton discharged her.

On June 4, 1984, appellant filed a claim for unemployment compensation with the Florida Department of Labor and Employment Security. Under Florida law, unemployment compensation benefits are available to persons who become “unemployed through no fault of their own.” Fla. Stat. §443.021 (1985). Lawton contested the payment of benefits on the ground that Hobbie was “disqualified for benefits” because she had been discharged for “misconduct connected with [her] work.” §443.101(l)(a).

A claims examiner for the Bureau of Unemployment Compensation denied Hobbie’s claim for benefits, and she appealed that determination. Following a hearing before a referee, the Unemployment Appeals Commission (Appeals Commission) affirmed the denial of benefits, agreeing that Hobbie’s refusal to work scheduled shifts constituted “misconduct connected with [her] work.” App. 3.

Hobbie challenged the Appeals Commission’s order in the Florida Fifth District Court of Appeal. On September 10, 1985, that court summarily affirmed the Appeals Commission. We postponed jurisdiction, 475 U. S. 1117 (1985), and we now reverse.

II

Under our precedents, the Appeals Commission’s disqualification of appellant from receipt of benefits violates the Free Exercise Clause of the First Amendment, applicable to the States through the Fourteenth Amendment. Sherbert v. Verner, 374 U. S. 398 (1963); Thomas v. Review Bd. of Indiana Employment Security Div., 450 U. S. 707 (1981). In Sherbert we considered South Carolina’s denial of unemployment compensation benefits to a Sabbatarian who, like Hobbie, refused to work on Saturdays. The Court held that the State’s disqualification of Sherbert

“force[d] her to choose between following the precepts of her religion and forfeiting benefits, on the one hand, and abandoning one of the precepts of her religion in order to accept work, on the other hand. Governmental imposition of such a choice puts the same kind of burden upon the free exercise of religion as would a fine imposed against [her] for her Saturday worship.” 374 U. S., at 404.

We concluded that the State had imposed a burden upon Sherbert’s free exercise rights that had not been justified by a compelling state interest.

In Thomas, too, the Court held that a State’s denial of unemployment benefits unlawfully burdened an employee’s right to free exercise of religion. Thomas, a Jehovah’s Witness, held religious beliefs that forbade his participation in the production of armaments. He was forced to leave his job when the employer closed his department and transferred him to a division that fabricated turrets for tanks. Indiana then denied Thomas unemployment compensation benefits. The Court found that the employee had been “put to a choice between fidelity to religious belief or cessation of work” and that the coercive impact of the forfeiture of benefits in this situation was undeniable:

“ ‘Not only is it apparent that appellant’s declared ineligibility for benefits derives solely from the practice of . . . religion, but the pressure upon [the employee] to forego that practice is unmistakable.”’ Thomas, supra, at 717 (quoting Sherbert, supra, at 404).

We see no meaningful distinction among the situations of Sherbert, Thomas, and Hobbie. We again affirm, as stated in Thomas:

‘Where the state conditions receipt of an important benefit upon conduct proscribed by a religious faith, or where it denies such a benefit because of conduct mandated by religious belief, thereby putting substantial pressure on an adherent to modify his behavior and to violate his beliefs, a burden upon religion exists. While the compulsion may be indirect, the infringement upon free exercise is nonetheless substantial.” 450 U. S., at 717-718 (emphasis added).

Both Sherbert and Thomas held that such infringements must be subjected to strict scrutiny and could be justified only by proof by the State of a compelling interest. The Appeals Commission does not seriously contend that its denial of benefits can withstand strict scrutiny; rather it urges that we hold that its justification should be determined under the less rigorous standard articulated in Chief Justice Burger’s opinion in Bowen v. Roy, 476 U. S. 693, 707-708 (1986): “[T]he Government meets its burden when it demonstrates that a challenged requirement for governmental benefits, neutral and uniform in its application, is a reasonable means of promoting a legitimate public interest.” Five Justices expressly rejected this argument in Roy. See id., at 715-716 (Blackmun, J., concurring in part); id., at 728 (O’Connor, J., joined by Brennan and Marshall, JJ., concurring in part and dissenting in part); id., at 733 (White, J., dissenting). We reject the argument again today. As Justice O’Connor pointed out in Roy, “[s]uch a test has no basis in precedent and relegates a serious First Amendment value to the barest level of minimal scrutiny that the Equal Protection Clause already provides.” Id., at 727. See also Wisconsin v. Yoder, 406 U. S. 205, 215 (1972) (“[O]nly those interests of the highest order and those not otherwise served can overbalance legitimate claims to the free exercise of religion”).

The Appeals Commission also suggests two grounds upon which we might distinguish Sherbert and Thomas from the present case. First, the Appeals Commission points out that in Sherbert the employee was deemed completely ineligible for benefits under South Carolina’s unemployment insurance scheme because she would not accept work that conflicted with her Sabbath. The Appeals Commission contends that, under Florida law, Hobbie faces only a limited disqualification from receipt of benefits, and that once this fixed term has been served, she will again “be on an equal footing with all other workers, provided she avoids employment that conflicts with her religious beliefs.” Brief for Appellee Appeals Commission 12. The Appeals Commission argues that such a disqualification provision is less coercive than the ineligibility determination in Sherbert, and that the burden it imposes on free exercise is therefore permissible.

This distinction is without substance. The immediate effects of ineligibility and disqualification are identical, and the disqualification penalty is substantial. Moreover, Sherbert was given controlling weight in Thomas, which involved a disqualification provision similar in all relevant respects to the statutory section implicated here. See Thomas, 450 U. S., at 709-710, n. 1.

The Appeals Commission also attempts to distinguish this case by arguing that, unlike the employees in Sherbert and Thomas, Hobbie was the “agent of change” and is therefore responsible for the consequences of the conflict between her job and her religious beliefs. In Sherbert and Thomas, the employees held their respective religious beliefs at the time of hire; subsequent changes in the conditions of employment made by the employer caused the conflict between work and belief. In this case, Hobbie’s beliefs changed during the course of her employment, creating a conflict between job and faith that had not previously existed. The Appeals Commission contends that “it is . . . unfair for an employee to adopt religious beliefs that conflict with existing employment and expect to continue the employment without compromising those beliefs” and that this “intentional disregard of the employer’s interests . . . constitutes misconduct.” Brief for Appellee Appeals Commission 20-21.

In effect, the Appeals Commission asks us to single out the religious convert for different, less favorable treatment than that given an individual whose adherence to his or her faith precedes employment. We decline to do so. The First Amendment protects the free exercise rights of employees who adopt religious beliefs or convert from one faith to another after they are hired. The timing of Hobbie’s conversion is immaterial to our determination that her free exercise rights have been burdened; the salient inquiry under the Free Exercise Clause is the burden involved. In Sherbert, Thomas, and the present case, the employee was forced to choose between fidelity to religious belief and continued employment; the forfeiture of unemployment benefits for choosing the former over the latter brings unlawful coercion to bear on the employee’s choice.

Finally, we reject the Appeals Commission’s argument that the awarding of benefits to Hobbie would violate the Establishment Clause. This Court has long recognized that the government may (and sometimes must) accommodate religious practices and that it may do so without violating the Establishment Clause. See, e. g., Wisconsin v. Yoder, 406 U. S. 205 (1972) (judicial exemption of Amish children from compulsory attendance at high school); Walz v. Tax Comm’n, 397 U. S. 664 (1970) (tax exemption for churches). As in Sherbert, the accommodation at issue here does not entangle the State in an unlawful fostering of religion:

“In holding as we do, plainly we are not fostering the ‘establishment’ of the Seventh-day Adventist religion in South Carolina, for the extension of unemployment benefits to Sabbatarians in common with Sunday worshipers reflects nothing more than the governmental obligation of neutrality in the face of religious differences, and does not represent the involvement of religious with secular institutions which it is the object of the Establishment Clause to forestall.” 374 U. S., at 409.

1 — 1 1 — \ HH

We conclude that Florida s refusal to award unemployment compensation benefits to appellant violated the Free Exercise Clause of the First Amendment. Here, as in Sherbert and Thomas, the State may not force an employee “to choose between following the precepts of her religion and forfeiting benefits, . . . and abandoning one of the precepts of her religion in order to accept work.” Sherbert, 374 U. S., at 404. The judgment of the Florida Fifth District Court of Appeal is therefore

Reversed.

Chief Justice Rehnquist,

dissenting.

I adhere to the views I stated in dissent in Thomas v. Review Bd. of Indiana Employment Security Div., 450 U. S. 707, 720-727 (1981). Accordingly, I would affirm.

Justice Powell,

concurring in the judgment.

The Court properly concludes that Sherbert v. Verner, 374 U. S. 398 (1963), and Thomas v. Review Bd. of Indiana Employment Security Div., 450 U. S. 707 (1981), control the decision in this case. In both of those cases, the Court applied strict scrutiny analysis to a State’s decision to deny unemployment benefits to an employee forced to leave a job because of his or her religious convictions. In each of these cases, the Court found that the State’s action was not justified by a compelling interest and therefore violated the Free Exercise Clause of the First Amendment. The situation in this case is remarkably similar: The State denied Hobbie unemployment compensation, even though she was forced to leave her job because of sincerely held religious beliefs. As the Court recognizes, there is “no meaningful distinction among the situations of Sherbert, Thomas, and Hobbie.” Ante, at 141. Accordingly, the established analysis of Sherbert and Thomas should apply to this case.

This Court’s decision last Term in Bowen v. Roy, 476 U. S. 693 (1986), did nothing to undercut the applicability of Sherbert and Thomas to the present case. A plurality in Roy indicated that “some incidental neutral restraints on the free exercise of religion,” such as the requirement that applicants for Social Security benefits use assigned numbers, need not be supported by a compelling justification. 476 U. S., at 712. The plurality distinguished Sherbert and Thomas as cases where the statute at issue “created a mechanism for individualized exemptions.” 476 U. S., at 708. The plurality noted:

“If a [S]tate creates such a mechanism, its refusal to extend an exemption to an instance of religious hardship suggests a discriminatory intent. ... In [Sherbert and Thomas], therefore, it was appropriate to require the State to demonstrate a compelling reason for denying the requested exemption.” Ibid.

Thus, the decision in Roy makes explicitly clear that its reasoning does not apply to the state conduct in this case.

The Court recognizes in a footnote that the reasoning of Roy does not apply to this case. Ante, at 142, n. 7. Instead of relying on this distinction, however, the Court reaches out to reject the reasoning of Roy in toto. This strikes me as inappropriate and unnecessary. Given its context, the Court’s rejection of Roy’s reasoning is dictum. The proper approach in this case is to apply the established precedent of Sherbert and Thomas. Because the Court goes further, I concur only in the judgment.

Justice Stevens,

concurring in the judgment.

As the Court concludes, ante, at 141-142, this case is controlled by Sherbert v. Verner, 374 U. S. 398 (1963), and Thomas v. Review Bd. of Indiana Employment Security Div., 450 U. S. 707 (1981). The State of Florida provides unemployment benefits to those persons who become “unemployed through no fault of their own,” Fla. Stat. §443.021 (1985), but singles out the religiously motivated choice that subjected Paula Hobbie to dismissal as her fault and indeed as “misconduct connected with . . . work.” §443.101. The State thus regards her “religious claims less favorably than other claims,” see Bowen v. Roy, 476 U. S. 693, 707, n. 17 (1986) (Stevens, J., concurring in part and concurring in result). In such an instance, granting unemployment benefits is necessary to protect religious observers against unequal treatment. See United States v. Lee, 455 U. S. 252, 264, n. 3 (1982) (Stevens, J., concurring in judgment). I also agree with the Court’s explanation, ante, at 142-143, of why the two grounds upon which we might distinguish Sherbert and Thomas must be rejected. Accordingly, I concur in the judgment.

       An employer’s duty to accommodate the religious beliefs of employees is governed by Title VII of the Civil Rights Act of 1964. 42 U. S. C. § 2000e et seq. Hobbie has not sought relief pursuant to Title VII in this action.

       It is undisputed that appellant’s conversion was bona fide and that her religious belief is sincerely held. See Record 70, 100.

       The Florida statute defines “misconduct” as follows:
      “ ‘Misconduct’ includes, but is not limited to, the following, which shall not be construed in pari materia with each other:
      “(a) Conduct evincing such willful or wanton disregard of an employer’s interests as is found in deliberate violation or disregard of standards of behavior which the employer has the right to expect of his employee; or

        “(b) Carelessness or negligence of such a degree or recurrence as to manifest culpability, wrongful intent, or evil design or to show an intentional and substantial disregard of the employer’s interests or of the employee’s duties and obligations to his employer.” Fla. Stat. §443.036(24) (1985).

       The Fifth District Court of Appeal issued an order stating: “PER CU-RIAM. AFFIRMED.” App. 6. See 475 So. 2d 711 (1985). Under Florida law, a per curiam affirmance issued without opinion cannot be appealed to the State Supreme Court. See Fla. Rule App. Proc. 9.030(a)(2)(A)(i-iv). Hobbie therefore sought review directly in this Court.

       The parties initially disagreed about whether an appeal lay under 28 U. S. C. § 1257(2). The Appeals Commission maintained that the decision of the Fifth District Court of Appeal did not draw into question the constitutionality of the state statute and, therefore, that an appeal did not lie. See Motion to Dismiss or Affirm 7-11. However, the Appeals Commission now concedes that the appeal is proper. Brief for Appellee Appeals Commission 4-6. See R. Stem, E. Gressman, & S. Shapiro, Supreme Court Practice 112 (6th ed. 1986) (appeal lies under 28 U. S. C. § 1257(2) even if the state court has not been explicit in its rejection of the constitutional claim raised); cf. Lawrence v. State Tax Comm’n, 286 U. S. 276, 282-283 (1932).

       See Cantwell v. Connecticut, 310 U. S. 296 (1940); Illinois ex rel. McCollum v. Board of Education, 333 U. S. 203 (1948).

       In Bowen v. Roy, 476 U. S. 693 (1986), the Court considered a free exercise challenge to the statutory requirement that a Social Security number be supplied by any applicant seeking certain welfare benefits. In his opinion Chief Justice Burger expressly reaffirmed Sherbert v. Verner, 374 U. S. 398 (1963), and Thomas v. Review Bd. of Indiana Employment Security Div., 450 U. S. 707 (1981), and distinguished those cases from Roy. He observed that the statutes at issue in Sherbert and Thomas provided:
      “[A] person was not eligible for unemployment compensation benefits if, ‘without good cause,’ he had quit work or refused available work. The ‘good cause’ standard created a mechanism for individualized exemptions. If a state creates such a mechanism, its refusal to extend an exemption to an instance of religious hardship suggests a discriminatory intent. Thus, as was urged in Thomas, to consider a religiously motivated resignation to be ‘without good cause’ tends to exhibit hostility, not neutrality, towards religion. ... In those cases, therefore, it was appropriate to require the State to demonstrate a compelling reason for denying the requested exemption.” 476 U. S., at 708 (citations omitted).
      Thus, even if the Court had accepted the reasoning of the Chief Justice’s opinion in Roy — which it did not — we would apply strict scrutiny in this ease. Although the purpose of the statute is to provide benefits to those persons who become “unemployed through no fault of their own,” Fla. Stat. §443.021 (1985), Florida nonetheless views a religiously motivated choice which leads to dismissal as “misconduct connected with . . . work.” §443.101. This scheme — which labels and penalizes behavior dictated by religious belief as intentional misconduct — exhibits greater hostility toward religion than one deeming such resignations to be “without good cause.”

       When an employee voluntarily leaves a position without good cause attributable to the employer, he or she is disqualified from receipt of benefits for the week of the departure and until he or she becomes reemployed and earns 17 times the weekly benefit amount. §443.101(l)(a)(l). The penalty for discharge due to misconduct connected with work — the relevant provision here — is identical to that for voluntary departure, except that an additional penalty of a specified number of weeks may be added depending upon the severity of the employee’s offense. § 443.101(l)(a)(2).

       Cf. United States v. Ballard, 322 U. S. 78, 87 (1944) (In applying the Free Exercise Clause, courts may not inquire into the truth, validity, or reasonableness of a claimant’s religious beliefs); Callahan v. Woods, 658 F. 2d 679, 687 (CA9 1981) (“If judicial inquiry into the truth of one’s religious beliefs would violate the free exercise clause, an inquiry into one’s reasons for adopting those beliefs is similarly intrusive. So long as one’s faith is religiously based at the time it is asserted, it should not matter, for constitutional purposes, whether that faith derived from revelation, study, upbringing, gradual evolution, or some source that appears entirely incomprehensible”) (citation omitted).

       In the unemployment benefits context, the majorities and those dissenting have concluded that, were a State voluntarily to provide benefits to individuals in Hobbie’s situation, such an accommodation would not violate the Establishment Clause. See Thomas, 450 U. S., at 719-720 (quoting Sherbert, 374 U. S., at 409); 450 U. S., at 723 (Rehnquist, J., dissenting); Sherbert, supra, at 422-423 (Harlan, J., dissenting).

       The Appeals Commission contends that this Court’s recent decision in Estate of Thornton v. Caldor, Inc., 472 U. S. 703 (1985), reveals that the accommodation sought by Hobbie would constitute an unlawful establishment of religion. In Thornton, we held that a Connecticut statute that provided employees with an absolute right not to work on their Sabbath violated the Establishment Clause. The Court determined that the State’s “unyielding weighting in favor of Sabbath observers over all other interests . . . ha[d] a primary effect that impermissibly advance[d] a particular religious practice,” id., at 710, and placed an unacceptable burden on employers and co-workers because it provided no exceptions for special circumstances regardless of the hardship resulting from the mandatory accommodation.
      In contrast, Florida’s provision of unemployment benefits to religious observers does not single out a particular class of such persons for favorable treatment and thereby have the effect of implicitly endorsing a particular religious belief. Rather, the provision of unemployment benefits generally available within the State to religious observers who must leave their employment due to an irreconcilable conflict between the demands of work and conscience neutrally accommodates religious beliefs and practices, without endorsement.