Supreme Court hears Catholic groups' claim for religious tax exemption

NBC News

31-03-2025

WASHINGTON — Delving into the latest in a series of religious rights cases, the Supreme Court on Monday considers whether Wisconsin officials wrongly concluded that Catholic-affiliated charitable groups were not eligible for an exemption from a state tax that funds unemployment benefits.
Although the state allows exemptions for churches and associated nonprofits, it concluded that the groups operating under the umbrella of the Catholic Charities Bureau of the Diocese of Superior were not sufficiently religious in purpose to receive the same treatment.
The groups in question — Headwaters, Barron County Developmental Services, Diversified Services and Black River Industries — primarily serve developmentally disabled people. The programs are open to non-Catholics.
The groups argue that their rights have been violated under the free exercise clause of the Constitution's First Amendment. The provision has long been interpreted to exempt religious institutions from taxation.
The court has a 6-3 conservative majority that is sympathetic to religious claims and has in a series of recent cases strengthened the free exercise clause.
The Wisconsin Labor and Industry Review Commission found that the charitable groups were not 'operated primarily for religious purposes' under state law.
The Wisconsin Supreme Court last year upheld the state commission's finding, saying the groups' activities were mostly secular in nature and that they do not 'attempt to imbue program participants with the Catholic faith nor supply any religious materials.'
The Wisconsin unemployment compensation system was set up in 1932 to provide a safety net for people who lose their jobs. Similar programs in other states and the Federal Unemployment Tax Act also include religious exemptions.
Various groups representing different Christian sects and other religious faiths have backed the Catholic groups in the case, as has the Trump administration.