In the current religious rights case before the U.S. Supreme Court, there seems to be an inclination in favor of a Catholic charitable group challenging Wisconsin’s stance. During a session on Monday, the justices appeared sympathetic to arguments that the Catholic Charities Bureau should be exempt from paying unemployment taxes due to the religious motivations driving their social services work. Wisconsin law currently exempts certain religious groups from such taxes.
Justice Neil Gorsuch highlighted a potential constitutional issue by stating, “Isn’t it a fundamental principle of our First Amendment that the state shouldn’t be picking and choosing between religions?” This case is among three this term involving religious questions, with the others tackling religious objections to school materials and funding for religious schools.
According to Colin Roth, a lawyer for Wisconsin, the Catholic Charities Bureau does not qualify for the tax exemption because its daily operations do not explicitly involve religious teachings. Roth also noted that the organization has been paying the tax for over five decades. He warned that a favorable ruling for the charity might encourage larger religiously-affiliated employers, like hospitals, to withdraw from the state unemployment system.
Though met with scrutiny from both liberal and conservative justices, including inquiries from Amy Coney Barrett about the limits of such an exemption, questions remain. Justice Barrett remarked on the challenge of defining the parameters, asking, “One of the problems here is figuring out what the line is.”
The Trump administration has shown its support for the charitable organization, requesting the Supreme Court to overturn the Wisconsin Supreme Court’s decision, which had supported the state. Deputy Solicitor General Curtis Gannon argued that the state court had erred in its interpretation of federal law, contending both motivations and operations do not need to be religious to qualify for an exemption.
Interestingly, the proceedings coincide with an impending election for the Wisconsin Supreme Court—a contest attracting the involvement of notable figures like Elon Musk.
The Catholic Charities Bureau contends that the decision from the state’s highest court infringes upon First Amendment rights, as it mandates determinations about what activities qualify as religious. Liberal Justice Elena Kagan raised concerns about the state’s criteria for exemption, suggesting it unfairly targets non-proselytizing faiths, noting, “I thought it was pretty fundamental that we don’t treat some religions better than other religions.”
Currently, religious organizations under church control can be exempt from the unemployment tax in Wisconsin if their primary purpose is religious. Despite this, Catholic Charities Bureau has complied with tax payments since 1972. The organization receives substantial public funding, and there are no religious requirements for employees or service recipients as per the state court filings.
Should the Supreme Court rule in favor of Catholic Charities, employees would be integrated into the faith’s unemployment system, which the charity claims surpasses the state’s version. However, Wisconsin argues that while costs are similar, the state’s system provides greater procedural protection for employees disputing denied claims.
A resolution in this case is anticipated by late June.