How has the First Amendment been interpreted in the context of a tax exemption for a church?

Moreover, tax exemptions of this kind have gone practically unquestioned as to the effect of the First Amendment for nearly a century and a half. See quotation in majority opinion from Lundberg v. County of Alameda, 46 Cal.2d 644, 298 P.2d 1. 'An examination of court opinions discloses the fact that legislation granting indirect subsidies, in the form of tax exemption, is upheld by the courts, even though a direct subsidy to the same institutions would be denied under the doctrine of direct public purpose. This is amply illustrated in the case of churches * * *' (Minn.Law Rev., vol. 18, at p. 419 (1933-1934).)