The U.S. Supreme Court decided on Dec. 13 to examine whether a Wisconsin Catholic charity’s work is tied closely enough to religion to allow it to be exempt from paying unemployment tax.
Wisconsin law excuses religious organizations that are “operated, supervised, controlled, or principally supported by a church or convention or association of churches” from paying state unemployment tax.
The Wisconsin Supreme Court determined 4–3 in March that Catholic Charities is not “operated primarily for religious purposes,” so it fails to meet the requirements for a tax exemption.
That court held that the activities of Catholic Charities do not qualify as “typical” religious activities because the organization does not “attempt to imbue program participants with the Catholic faith,” and the help it provides to those with mental and developmental disabilities could be carried out by secular organizations.
Wisconsin Supreme Court Justice Ann Walsh Bradley wrote that “if we looked to the church’s purpose in operating the organization only, then any religious affiliated organization would always be exempt.”
The organizations asked the nation’s highest court to decide if Wisconsin is running afoul of First Amendment religious protections “by denying a religious organization an otherwise-available tax exemption because the organization does not meet the state’s criteria for religious behavior,” according to the petition.
The charities argue that the state court erred when it found that the services they provide “do not have a religious purpose.”
“Put another way, it doesn’t matter if Catholic Charities gives a cup of water in Jesus’ name, because non-religious charities offer cups of water too,” the petition said, interpreting the rationale behind the state court’s decision.
The state court ruling provides an “absurd result [that] deepens a split between state courts that require religious entities to conform to stereotypes to qualify for the ‘religious purposes’ exemption and those that do not.”
The highest court should turn away the case because “there is no split of authority among the state supreme courts on the First Amendment claims [the petitioners] present.” Nor is there a split among federal courts of appeal, the state commission said.
“Courts routinely deny religious tax exemptions to entities that assert religious motivations without overly entangling themselves in religious matters,” the brief stated.
Nor does the unemployment tax violate the petitioners’ right to the free exercise of religion because “it imposes no constitutionally significant burden on their religious exercise.” The law authorizing the tax is “a general law that is neutral and nondiscriminatory on questions of religious belief.”
No date has yet been set for the oral argument in the case.
If the U.S. Supreme Court schedules oral argument for early in the new year, a decision could follow by June 2025.
