Note:
James M. Summers, Constitutional Law—State Action—Granting Federal and State Tax Exemptions to Private Foundations Constitutes State Action. Jackson v. Statler Foundation (2d Cir. 1974), 53 Texas L. Rev. 138 (1974).
 

Abstract:
In Jackson, the Second Circuit held that tax exemptions can so involve government in foundation activities that the exemptions constitute state action. In the context of a civil rights claim, the Second Circuit suggested that the granting of tax exempt status to a private foundation which engages in racially discriminatory conduct connotes governmental approval of that conduct. The author argues that this decision ignores the Supreme Court’s holding in Walz v. Tax Commissioner that tax exemption does not represent governmental sponsorship of foundation activities. Further, the author argues that this decision will unduly stifle foundation decisionmaking, that it provides little guidance for future decisions, and that it is inconsistent with prior Second Circuit precedent on governmental action.