This report presents the results of one of the first empirical investigations of how a tax subsidy for tuition costs actually influences parents' school choices. It provides data about subsidy costs, utilization, and effects in Minnesota, the first state to have a tuition subsidy pass judicial review at all levels of the court system. The study also examines the effects of other state aid policies on nonpublic school operations and on parent choice of school, and it investigates the process by which parents make schooling choices. Findings suggest that the tax deduction has little or no effect on parental choice, while disproportionately benefiting upper-income households and parents who would have made the same schooling choices in the absence of the deduction. A reimbursable tax credit would be accessible to more parents than a tax deduction, while an educational voucher, representing "up front" cash, would have even greater effects on parents' school choices. However, other policies that directly increase access to schooling alternatives, such as lower immediate costs and free bus transportation, have the most effect on the schooling choices of low and moderate income parents. An appendix presents the selection and disposition of survey samples. Two pages of references and numerous tables are included. (IW)