The Supreme Court unanimously sided with Catholic Charities Bureau on Thursday, ruling that Wisconsin discriminated against the organization by denying tax exempt status and violated the First Amendment’s protection for religion.
Wisconsin has a law, similar to most states and the federal government, that exempts certain religious organizations from paying unemployment compensation taxes. The statute exempts nonprofit organizations “operated primarily for religious purposes” and “operated, supervised, controlled, or principally supported by a church or convention or association of churches.” Catholic Charities Bureau and four of its sub-entities tried to obtain the exemption in 2016 as an organization controlled by the Roman Catholic Diocese of Superior, Wisconsin.
After years of litigation, the Wisconsin Supreme Court ultimately denied the exemption, ruling that Catholic Charities Bureau was not “operated primarily for religious purposes” because they do not engage in proselytization or limit their charitable services to Catholics. However, Catholic Charities Bureau argued that Catholic teachings do not permit “misus[ing] works of charity for purposes of proselytism.”
“There may be hard calls to make in policing that rule, but this is not one,” Justice Sonia Sotomayor wrote for the court.
“When the government distinguishes among religions based on theological differences in their provision of services, it imposes a denominational preference that must satisfy the highest level of judicial scrutiny,” she continued. “Because Wisconsin has transgressed that principle without the tailoring necessary to survive such scrutiny, the judgment of the Wisconsin Supreme Court is reversed, and the case is remanded for further proceedings not inconsistent with this opinion.”