On Friday, the U.S. Supreme Court took up a case that could change the scope of tax exemptions for religious groups.
The court agreed to hear the case after the Catholic Charities Bureau, which is based in Superior, Wisconsin, appealed a Wisconsin Supreme Court ruling that denied it a religious exemption from paying unemployment taxes.
Wisconsin law says employers who operate “primarily for religious purposes” are exempt from the state’s unemployment tax system. However, the state’s Supreme Court ruled that Catholic Charities’ work is not primarily religious because the organization employs people who aren’t Catholic and doesn’t proselytize.
Catholic Charities appealed the ruling, arguing that it violates the First Amendment’s religious freedom clause.
“Wisconsin is trying to make sure no good deed goes unpunished,” Eric Rassbach, the lawyer representing Catholic Charities in its appeal, said in a statement. “Penalizing Catholic Charities for serving Catholics and non-Catholics alike is ridiculous and wrong.”
Catholic Charities, represented by the Becket Fund for Religious Liberty, lambasted the lower court’s ruling in its petition.
“Put another way, it doesn’t matter if Catholic Charities gives a cup of water in Jesus’ name, because non-religious charities offer cups of water too. That absurd result deepens a split between state courts that require religious entities to conform to stereotypes to qualify for the ‘religious purposes’ exemption and those that do not.”
In addition to Catholic Charities, the case involves four “sub-entities” that primarily help the disabled.
“Wisconsin’s rule is both absurd and harmful,” Catholic Charities said in its appeal. “The rule takes away resources that would otherwise be used to help the poor and the needy.”
Wisconsin asked the court to uphold the state’s Supreme Court ruling.
“All courts look to some degree at the operations of the group seeking an exemption; none simply grant the exemption solely based on the group’s assertion that its activities are religiously motivated,” lawyers for the state wrote.
The U.S. Supreme Court, which has a 6-3 conservative majority, has issued several rulings over the last several years siding with religious groups and organizations against the state.
In 2022, the High Court ruled in Carson v. Makin that states must fund religious activities as part of an educational aid program, according to the American Civil Liberties Union.
In Kennedy v. Bremerton School District, the court ruled in favor of a Christian football coach who prayed with his players while on the job, saying that the First Amendment protected his activities.
The Associated Press reported on Friday that the case in Wisconsin will likely be argued in the spring.
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