Prior to October 2, 1984, Texas exempted from sales tax "magazine subscriptions running half a year or longer and entered as second class mail."

It determined that the tax exemption met the tests required under Lemon v. Kurtzman (1971),[2] and so did not violate the Establishment Clause.

In addition, the Court of Appeals determined that the tax exemption did not violate the Free Press Clause, as only a few publications were qualified.

Justice White concurred in the judgment but argued that under the Court's prior precedent in Arkansas Writers' Project v. Ragland (1987),[3] the Texas Law violated the Press Clause by taxing Texas Monthly but exempting other publishers solely on the basis of the religious content of their publications.

He argued that had the law been written to include other philosophical literature encouraging morality, it may have stood, but when it expressly focused on religion the Establishment Clause had been violated: "In this case, by confining the tax exemption exclusively to the sale of religious publications, Texas engaged in preferential support for the communication of religious messages."

He stated that though a tax exemption is similar economically to a subsidy, when discussing the Establishment Clause, they are different as found in Walz.