Wisconsin Catholic Charities Tax-Exempt Goes Before Supreme Court

In a dispute over whether or not a religious exemption is warranted, a Wisconsin Catholic Charities Branch has argued to the U.S. Supreme Court that the case is “simple” given the defendant’s (State of Wisconsin’s) multiple violations of the Religion Clauses of the First Amendment.

In Catholic Charities Bureau v. Wisconsin Labor & Industry Review Commission, the Catholic Charities Branch of the Diocese of Superior is fighting a March, 2024, state Supreme Court ruling that the organization’s activities aren’t primarily religious, therefore denying it an exemption from paying into the state’s unemployment compensation program, and preventing it from joining the Wisconsin Bishops’ own unemployment compensation program.

The Catholic Charities Bureau petitioned to the U.S. Supreme Court in August, 2024, and the nation’s high court agreed to hear the case in December. The organization submitted a Merits Brief on Jan. 27, where it laid out its interpretation of how the state violated the Constitution.

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“Wisconsin has denied Catholic Charities a religious exemption that the state freely extends to other religious organizations based on the absurd view that Catholic Charities’ aid to the needy isn’t actually religious at all,” the brief states. “The Religion Clauses of the First Amendment do not allow such a remarkable conclusion.”

“Instead, the Clauses work in tandem to protect a sphere of autonomy for religious organizations, to prevent entanglement of church and state, and to prohibit government discrimination among religious organizations,” the brief continues. “Wisconsin’s efforts to pick and choose among religious groups – and carve out works of mercy from the realm of the ‘religious’ altogether – thus violates the constitution three times over.”

Under Wisconsin law, as is the case in most states, churches and nonprofits that are operated for a religious purpose are generally exempt from paying into the state’s unemployment compensation program. For instance, the Diocese of Superior is exempt.

However, the diocese’s Catholic Charities Bureau is not. As outlined in the Merits Brief, that is because “under Wisconsin law, as definitively interpreted by the Wisconsin Supreme Court, Catholic Charities must show that its activities are sufficiently similar ‘in nature’ to whatever the state determines to be ‘typical’ religious activities.”

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