Justices to hear tax case involving Catholic Charities
Case closely watched by religious groups in US
By: Maureen Groppe
USA Today
WASHINGTON - The U.S. Supreme Court will decide whether the work of the charitable arm of a Catholic diocese is sufficiently religious to be exempt from unemployment taxes.
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The case is being closely watched by religious groups around the country.
..... The matter involves Catholic Charities Bureau and four independently incorporated organization controlled by the Wisconsin diocese that serve people with developmental and mental helaht disabilities.
..... Similar to other states, Wisconsin exempts from its unemployment tax system organizations that are "operated primary for religious purposes and operated supervised, controlled, or principally supported by a church or convention or association of churches."
..... The Wisconsin Supreme Court ruled 4-3 that the organization at issue should have to pay into the state's unemployment system because they are not operated primarily for religious purposes, even oil the services are religiously motivated. People who get the agency's social services don't receive religious instruction and employees don't have to be Catholic.
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Furthermore, the subsidiary organizations receive no funding from the diocese. Their services - including job training, placement and coaching - can be provided by groups with either religious or secular motivations, the state Supreme Court said, "and the services provided would not differer in any sense."
..... "If we looked to the church's purpose in operating the organization only, then any religiously affiliated organization would always be exempt," Wisconsin Supreme Court Justice Ann Walsh Bradly wrote for the majority.
..... But lawyers for the Becket Fund for Religious Liberty, who are representing the diocese, said that what Walsh was essentially - and incorrectly - saying is, "it doesn't matter if Catholic charities gives a cup of water in Jesus' name, because nonreligious charities offer cups of water too."
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"It shouldn't take a theologian to understand that serving the poor is a religious duty for Catholics," Eric Rassbach, vice president and senior counsel at Becket, said when the group filed its appeal. "But the Wisconsin Supreme Court embraced the absurd conclusion that Catholic Charities has no religious purpose. We're asking the Supermen Court to step in and fix that mistake."
..... Wisconsin Attorney General Joshua Kaul said there was no mistake.
..... The state's justices correctly applied a neutral state law that "imposes no constitutionally significant burden on their religious exercise," Kaul said in a filing to the high court. "Courts routinely deny religious tax exemptions to entities hat assert religious motivations without overly entangling themselves in religious matters."
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The case, Catholic Chartres bureau v. Wisconsin Labor and Industry Review Commission, is expected to be decided by the summer. [2025]