Corporations, Taxes, and Religion: The Hobby Lobby and Conestoga Contraceptive Cases

79 Pages Posted: 22 Apr 2013 Last revised: 24 Sep 2015

See all articles by Steven J. Willis

Steven J. Willis

University of Florida Levin College of Law

Date Written: April 22, 2013


Beginning in 2013, the federal government mandated that general business corporations include contraceptive and early abortion coverage in large employee health plans. Internal Revenue Code Section 4980D imposes a substantial excise tax on health plans violating the mandate. Indeed, for one company – Hobby Lobby – the expected annual tax is nearly one-half billion dollars. Dozens of “for profit” businesses have challenged the mandate on free exercise grounds, asserting claims under the First Amendment as well as under the Religious Freedom Restoration Act.

So far, courts have been reluctant to hold corporations have religious rights of their own; as a result, standing of a corporation to assert the religious beliefs and rights of owners has become the primary issue in the thirty-six separate cases moving through the courts. Courts are split on whether to grant standing; however, a large majority has used a variation of prudential or associational standing to grant preliminary injunctions against enforcement of the tax.

On November 26, 2013, the Court granted certiorari in the Hobby Lobby and Conestoga cases, arising from the 10th and 3d Circuits. The 10th, sitting en banc, essentially ruled in favor of Hobby Lobby by paving the way for a preliminary injunction; in contrast, the 3d ruled again Conestoga. During the period it lacked an injunction, Hobby Lobby chose not to comply with the mandate, while Conestoga has complied (though it continues to raise constitutional objections).

This article discusses the relationship of morality and religion to general business corporations. It concludes that over the past few decades, movements for social justice and corporate social responsibility have intertwined business corporations and moral issues, blurring the line between religion and commerce. It also concludes that courts should permit associational standing for closely-held corporations – particularly those electing S status for tax purposes – if the owners have unanimous (or near-unanimous) beliefs. It proposes a Faith Based Corporations Act (FBCA) as a vehicle for commercial businesses to declare their religious beliefs with state recognition.

Keywords: religion, tax, Hobby Lobby, free exercise, RFRA

Suggested Citation

Willis, Steven J., Corporations, Taxes, and Religion: The Hobby Lobby and Conestoga Contraceptive Cases (April 22, 2013). South Carolina Law Review, Vol. 65, No. 1, 2013, Available at SSRN: or

Steven J. Willis (Contact Author)

University of Florida Levin College of Law ( email )

P.O. Box 117625
Gainesville, FL 32611-7625
United States
(352) 273-0680 (Phone)
(352) 392-7647 (Fax)


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