In a unanimous decision this Thursday, the Supreme Court ruled in favor of a Catholic charity in Wisconsin, determining that the organization is not subject to the state’s unemployment tax while other religious entities are exempt.
The court found that Wisconsin’s tax protocols gave unfair preference to organizations exhibiting more pronounced religious expressions in their daily endeavors, contravening the First Amendment.
Justice Sonia Sotomayor penned the court’s opinion, emphasizing the necessity for government impartiality among different religions. She stated, “Ensuring ‘neutrality between religion and religion’ is a core principle of our constitutional framework. Although there might be challenging decisions required to uphold this, this particular instance is clear-cut.”
Wisconsin contended that the Catholic Charities Bureau had been adhering to tax payments for over five decades because its regular operations lacked direct religious instruction. According to court documents, the bulk of the group’s financial resources come from public funding, and neither its employees nor its beneficiaries are required to follow any particular faith.
Conversely, Catholic Charities argued for their exemption, asserting that their efforts to assist disabled, underprivileged, or elderly populations are rooted in their spiritual convictions, and the state should not have the authority to define what qualifies as religious work.
Represented by the Becket Fund for Religious Liberty, the Catholic organization was thrilled with the decision, which they saw as a landmark for religious freedom. Eric Rassbach, vice president and senior legal advisor, commented, “The notion that Catholic Charities is non-religious because it serves all individuals, irrespective of their beliefs, is simply absurd.”
Following the verdict, the Catholic charity is likely to withdraw from the state unemployment system and adopt one managed by their faith community.
This decision could have larger repercussions nationwide, since numerous states offer tax exemptions to religious bodies and some large employers with religious ties, such as hospital systems. Lance Jacobs, a tax attorney with Forvis Mazars, remarked, “Predicting the future isn’t straightforward, but this ruling could introduce significant shifts.”
On the contrary, the group Freedom From Religion criticized the decision. Co-president Annie Laurie Gaylor stated, “Equating religiously affiliated nonprofits with all others doesn’t breach the First Amendment.”
The charity’s appeal followed an unfavorable ruling from Wisconsin’s highest court, with the federal government, under President Donald Trump, supporting Catholic Charities.
In recent years, the Supreme Court, now with a conservative majority, has frequently ruled in favor of religious entities and plaintiffs. However, in a recent term, a plan for a publicly funded Catholic charter school was thwarted when the justices split evenly due to Amy Coney Barrett’s recusal.
The court is also presently reviewing a case involving religious objections to certain reading materials in public schools. There, the majority seemed to support the religious rights of Maryland parents wishing to exclude their children from lessons that include storybooks featuring LGBTQ characters.
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