Latest news with #CatholicCharitiesBureau
Forbes
an hour ago
- Politics
- Forbes
Supreme Court Sides With Catholic Group In Tax Exemption Dispute Over Non-Religious Activities
The Catholic Charities Bureau provides services to the poor, the disadvantaged, the disabled, the elderly and children with special needs. In a unanimous decision, the U.S. Supreme Court ruled that a Catholic organization qualifies for a tax exemption even though its operations were not primarily religious. The decision overturned a Wisconsin Supreme Court ruling. Under Wisconsin law, certain religious organizations may be exempt from paying taxes, including unemployment compensation taxes. This is similar to laws in other states that provide exemptions based on specific criteria. In other words, tax-exempt status for federal income tax purposes doesn't always translate to state income or other tax exemptions. In this case, Wisconsin law exempts any 'church or convention or association of churches' an services provided '[b]y a duly ordained, commissioned or licensed minister of a church in the exercise of his or her ministry or by a member of a religious order in the exercise of duties required by such order.' The exemption also covers nonprofit organizations 'operated, supervised, controlled, or principally supported by a church or convention or association of churches,' but only if they are 'operated primarily for religious purposes.' Catholic Charities Bureau, Inc. (CCB) and four related organizations sought an exemption because they are separately incorporated from the Diocese, but claim federal tax-exempt status under the Roman Catholic Church's group tax exemption (this 'umbrella' treatment is common in the tax-exempt world). The Wisconsin Supreme Court denied the exemption, finding that CCB and the related organizations were not 'operated primarily for religious purposes because the charitable services went beyond theology. The U.S. Supreme Court disagreed, finding that drawing those lines violated the First Amendment. The Catholic Charities Bureau has, it says on its website, provided 'services to the poor, the disadvantaged, the disabled, the elderly and children with special needs as an expression of the social ministry of the Catholic Church in the Diocese of Superior' for more than 100 years. Today, CCB boasts more than 50 programs serving more than 10,500 people—services are not limited by race, color, national origin, or religion. That apparently innocuous distinction was one of the arguments used by the state against CCB. The organization's activities did not qualify as 'typical' religious activities because they serve and employ non-Catholics. The state also found that CCB does not 'attempt to imbue program participants with the Catholic faith,' and its services to the poor and needy could also be provided by secular (non-religious) organizations. Congress enacted the Federal Unemployment Tax Act (FUTA) in 1935 to provide benefits to unemployed workers. The FUTA tax rate is 6% on the first $7,000 paid to employees during the year and is paid by all employers unless they qualify for an exemption. Notably, FUTA exempts church-controlled religious organizations 'operated primarily for religious purposes' from paying unemployment tax, the result of an exemption granted by Congress in 1970. Since then, 47 states have adopted language that is identical to, or nearly identical to FUTA's language. FUTA tax may be offset by credits of up to 90% for state unemployment taxes paid—all states have complementary statutes that impose, at a minimum, the coverage mandated by federal law. This tax is only paid by employers, not employees. The tax funds unemployment programs. (CCB noted in its petition that employees have separate unemployment coverage. Wisconsin bishops previously created the Church Unemployment Pay Program (CUPP) 'to assist parishes, schools, and other church employers in meeting their social justice responsibilities by providing church funded unemployment coverage.') CCB applied for an exemption under state law. The Department of Workforce Development determined that CCB and its sub-entities were not primarily operated for religious purposes and denied the exemption. CCB appealed, and after a hearing, the administrative law judge reversed the decision. However, the Labor and Industry Review Commission reversed the reversal (stay with me), finding that the exemption turns on an organization's 'activities, not the religious motivation behind them or the organization's founding principles.' Since CCB provided secular (non-religious) services, the Commission concluded that they do not qualify for an exemption The matter went to court (outside of the administrative channels) and ended up in the Wisconsin Supreme Court, which held on March 14, 2024, that CCB's 'activities are primarily charitable and secular' and not religious, which means it would not qualify for the exemption. CCB filed a petition for writ of certiorari with the Supreme Court in May of 2024. Parties do that when seeking a review of the case—typically, it's in response to another court decision. In that petition, CCB noted that in the 1980s, the U.S. Supreme Court granted review in two cases (St. Martin Evangelical Lutheran Church v. South Dakota and California v. Grace Brethren Church) to determine whether the imposition of state unemployment taxes on certain religious organizations under the Federal Unemployment Tax Act (FUTA) and related state statutes violated the First Amendment. But, CCB argued, while those cases were resolved, the Court expressly declined to answer the First Amendment questions, resulting in a split among courts. If the Supreme Court decides to hear a matter, it's called a grant of certiorari—by practice, at least four justices must vote to hear the case to be granted cert. Usually, cert is granted in a case of considerable importance or one involving a split. A split happens when courts disagree on a matter of federal law, reaching different conclusions about its application—that's what CCB argued happened here. In its petition, the questions presented by CCB were: The state argued that no split of authority existed on the constitutional question and further contended that the Wisconsin Supreme Court decision does not directly conflict with the decisions of any federal circuit or state high court. The Supreme Court disagreed with the state, granting certiorari in December of 2024. The scope of the case was, however, limited to Question 1. (Does a state violate the First Amendment's Religion Clauses by denying a religious organization an otherwise-available tax exemption because the organization does not meet the state's criteria for religious behavior?) Dozens of amici curiae briefs were filed before the decision. When it comes to legal issues before the Supreme Court, those with an interest or expertise in the subject but who aren't a party to the litigation may also file briefs to explain their point of view. These briefs are called amicus briefs and are filed by a party known as an amicus curiae, which translates to "friend of the court.' The U.S. Supreme Court determined that the Wisconsin Supreme Court's interpretation of the statute violated the First Amendment by discriminating against religious organizations based on their methods of religious expression. Justice Sonia Sotomayor wrote for the Court, 'A law that differentiates between religions along theological lines is textbook denominational discrimination.' She went on to write that CCB would, under the state's interpretation, qualify for the exemption 'if they engaged in proselytization or limited their services to fellow Catholics.' However, CCB's Catholic faith, however, bars them from doing exactly that. That means, she explained, that eligibility for the exemption 'ultimately turns on inherently religious choices.' While the state argued that the exemption was intended to draw stark theological lines, Sotomayor went on to write that the exemption 'functions at an organizational level, covering both the janitor and the priest in equal measure.' The Court acknowledged the importance of the government maintaining 'neutrality between religion and religion.' But, Sotomayor wrote pointedly, 'There may be hard calls to make in policing that rule, but this is not one.' With that, the Wisconsin Supreme Court case was overturned. The news was welcome by the Diocese. 'At the heart of Catholic Charities' ministry is Christ's call to care for the least of our brothers and sisters, without condition and without exception,' said Bishop James Powers, Bishop of the Diocese of Superior. 'We're grateful the Court unanimously recognized that improving the human condition by serving the poor is part of our religious exercise and has allowed us to continue serving those in need throughout our diocese and beyond.' 'Wisconsin shouldn't have picked this fight in the first place,' said Eric Rassbach, vice president and senior counsel at Becket, who represented CCB. 'It was always absurd to claim that Catholic Charities wasn't religious because it helps everyone, no matter their religion. Today, the Court resoundingly reaffirmed a fundamental truth of our constitutional order: the First Amendment protects all religious beliefs, not just those the government favors.' The Wisconsin Labor & Industry Review Commission did not immediately respond to a request for comment. Justice Sotomayor delivered the unanimous opinion for the Court, while Justices Jackson and Thomas filed concurring opinions. The case is Catholic Charities Bureau, Inc., v. Wisconsin Labor & Industry Review Commission (No. 24–154).
Yahoo
3 hours ago
- Business
- Yahoo
Supreme Court rules that Catholic groups were unlawfully barred from a religious tax exemption
WASHINGTON — The Supreme Court on Thursday ruled in favor of Catholic Church-affiliated charitable groups, saying they were wrongly denied religious exemptions from a Wisconsin tax that funds unemployment benefits. The justices ruled unanimously that the state's decision unlawfully discriminated against the groups on the basis of religion under the free exercise clause of the Constitution's First Amendment. The court rejected a Wisconsin Supreme Court decision that said that the groups operating under the Catholic Charities Bureau of the Diocese of Superior were not sufficiently religious in purpose. The state already provided exemptions for religious institutions. The First Amendment has long been interpreted to exempt religious entities from taxation. Writing for the court, liberal Justice Sonia Sotomayor noted the importance of the government remaining neutral when it comes to different religions. "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," Sotomayor said. But Wisconsin had "transgressed that principle," she added. The groups involved in the case — Headwaters, Barron County Developmental Services, Diversified Services and Black River Industries — primarily serve developmentally disabled people. Their programs are open to non-Catholics. The Wisconsin Labor and Industry Review Commission had concluded the charitable groups were not 'operated primarily for religious purposes' under state law. The Wisconsin Supreme Court in 2024 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. The Catholic groups had strong backing at the Supreme Court from other Christian sects and different religious faiths. This article was originally published on
Yahoo
4 hours ago
- Politics
- Yahoo
Supreme Court backs Catholic Charities' push to object to state taxes on religious grounds
The Supreme Court on Thursday cleared the way for a Catholic Charities chapter in Wisconsin to secure an exemption from certain state taxes in a decision that could expand the type of religious entities entitled to tax breaks under the First Amendment's protections for religion. It was the latest in a series of decisions from the Supreme Court in recent years that have sided with religious groups on everything from public funding for sectarian schools to allowing coaches to offer private prayers on the field after high school football games. 'It is fundamental to our constitutional order that the government maintain 'neutrality between religion and religion,'' Justice Sonia Sotomayor wrote for a unanimous court. 'There may be hard calls to make in policing that rule, but this is not one. 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 added. The Catholic Charities Bureau and four affiliate organizations had claimed that Wisconsin violated the First Amendment's religious protections by denying exemptions from the state's unemployment taxes. Churches already receive that exemption and so the question for the justices was, in essence, whether religiously affiliated entities that don't perform traditionally religious functions – such as services – should also qualify. The bureau describes itself as the 'social ministry arm of the Diocese of Superior' of Wisconsin and says that it carries out a 'wide variety of ministries for the elderly, the disabled, the poor,' and others. Wisconsin had argued that Catholic Charities had been participating in its unemployment insurance program without complaint since 1971. Forty-seven states and the federal government include exemptions from unemployment taxes for religious organizations similar to Wisconsin's, suggesting the court's decision could have an impact beyond the Badger State. The Trump administration sided with Catholic Charities, and it was concerned a broad ruling might affect the similar federal law. The Justice Department told the court it interprets federal law to exempt Catholic Charities and similar groups. Justice Clarence Thomas, a member of the court's conservative wing, wrote separately to argue in favor of a doctrine of 'church autonomy' that would further insulate religious institutions from taxes and government regulations. Thomas argued that the state court went too far by looking into how Catholic Charities was structured. 'The First Amendment's guarantee of church autonomy gives religious institutions the right to define their internal governance structures without state interference,' Thomas wrote. 'Perhaps the most important feature of today's ruling is that there was not a majority to take up the issue Justice Thomas wrote separately to underscore—whether regulations governing the tax-exempt status of religious organizations implicates, in Thomas's words, 'the First Amendment's guarantee of church autonomy,'' said Steve Vladeck, CNN Supreme Court analyst and professor at Georgetown University Law Center. 'By deciding this case (unanimously) on narrower grounds, the Court saves the much more fraught question of the extent to which the First Amendment does require church autonomy—and what that would mean for all kinds of local, state, and federal regulations—for a future case.' The majority concluded that Wisconsin's law, as interpreted by the state's top court, discriminated between religions because the groups performing the charity work did not proselytize – even though the group's faith bars practitioners from doing so. 'A law that differentiates between religions along theological lines is textbook denominational discrimination,' Sotomayor wrote for the court. 'Wisconsin's exemption, as interpreted by its Supreme Court, thus grants a denominational preference by explicitly differentiating between religions based on theological practices,' she wrote. Though technical, the case raised fundamental questions about the ability of courts to look behind the pulpit to assess the religiosity of certain organizations. Chief Justice John Roberts pressed the attorney representing Catholic Charities in March by asking whether a vegetarian restaurant might be entitled to an exemption from state taxes in the group's view if its owners claimed they were following a religious tenet against eating meat. Along those same lines, a question lurking behind the case was how it might apply to religiously affiliated hospitals. Approximately 787,000 employees work for six multibillion-dollar Catholic-affiliated health care systems, according to the Freedom from Religion Foundation, which filed a brief supporting the state. The Service Employees International Union, which also backs the state, estimated that more than a million workers are employed by religiously affiliated organizations. The conservative justices on the Supreme Court have in recent years blurred the line that once clearly separated church from state in a series of rulings siding with religious entities. They have done so in part on the theory that some government efforts intended to comply with the First Amendment's establishment clause have been overbroad and discriminated against religion. The court has expanded the circumstances under which taxpayer money may fund religious schools, for instance, it allowed a public high school football coach to pray on the 50-yard line and ruled that Boston could not block a Christian group from raising a flag at City Hall. But in this case, liberal Justice Elena Kagan signaled during the argument that she, too, had concerns with the idea that courts might take it upon themselves to second guess what sorts of activities might count as religious. It was clear in March that a majority of the justices were alarmed by the decision from the Wisconsin Supreme Court, which concluded that the work Catholic Charities performed was 'wholly' secular. 'Such services can be provided by organizations of either religious or secular motivations, and the services provided would not differ in any sense,' the majority wrote. In a dissent, two Wisconsin justices said that the court's decision 'looks through a seemingly Protestant lens to deem works of charity worthy of the exemption only if accompanied by proselytizing – a combination forbidden by Catholicism, Judaism, and many other religions.' By choosing which religions may benefit from the break, the dissent said, the state court's interpretation violated the First Amendment. Catholic Charities argued that its employees would continue to have unemployment coverage but that it would be provided by a church-affiliated entity rather than the state. The group's opponents say employees in other workplaces may not be so lucky and have noted that the state cannot guarantee that those plans will pay out when employees lose their jobs. This story has been updated with additional details.
Yahoo
4 hours ago
- Politics
- Yahoo
Supreme Court sides with Catholic Charity in tax case
The Supreme Court sided with a Catholic charity in a legal dispute with Wisconsin state authorities over unemployment benefit taxes. Justice Sonia Sotomayor's opinion for the court cited the First Amendment's mandate of 'government neutrality between religions.' As framed by the charity, the legal question in the case was whether a state violates the First Amendment by 'denying a religious organization an otherwise-available tax exemption because the organization does not meet the state's criteria for religious behavior.' Catholic Charities Bureau argued that its exclusion by the state from a religious exemption was unconstitutional 'in at least three ways,' including for allegedly being discriminatory. A divided Wisconsin Supreme Court sided with the state last year. The court's liberal majority concluded that the charity isn't 'operated primarily for religious purposes' under state law, over conservative dissent that said the majority 'rewrites the statute to deprive Catholic Charities of the tax exemption, rendering unto the state that which the law says belongs to the church.' Reversing the state court on Thursday, the U.S. Supreme Court deemed this case an easy one, reasoning that the state court failed to apply the rigorous constitutional analysis required. '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,' Sotomayor wrote for the court. '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,' she wrote, referring to the process of a higher court sending a case back to a lower court. The March 31 oral argument reflected bipartisan concern among Supreme Court justices in the charity's favor. The state had argued that the group didn't engage in 'distinctively religious activities' and didn't assert 'a religious objection to contributing to unemployment insurance.' Subscribe to the Deadline: Legal Newsletter for expert analysis on the top legal stories of the week, including updates from the Supreme Court and developments in the Trump administration's legal cases. This article was originally published on
Los Angeles Times
5 hours ago
- Politics
- Los Angeles Times
Supreme Court sides with Catholic Charities in religious-rights case over unemployment taxes
WASHINGTON — The Supreme Court decided Thursday that a Catholic charity doesn't have to pay Wisconsin unemployment taxes, one of a set of religious-rights cases the justices are considering this term. The unanimous ruling comes in a case filed by the Catholic Charities Bureau, which says the state violated the 1st Amendment's religious freedom guarantee when it required the organization to pay the tax while exempting other faith groups. Wisconsin argues the organization has paid the tax for over 50 years and doesn't qualify for an exemption because its day-to-day work doesn't involve religious teachings. Much of the groups' funding is from public money, and neither employees nor people receiving services have to belong to any faith, according to court papers. Catholic Charities, though, says it qualifies because its disability services are motivated by religious beliefs and the state shouldn't be making determinations about what work qualifies as religious. It appealed to the Supreme Court after Wisconsin's highest court ruled against it. President Trump's administration weighed in on behalf of Catholic Charites. Wisconsin has said that a decision in favor of the charity could open the door to big employers like religiously affiliated hospitals pulling out of the state unemployment system as well. The conservative-majority court has issued a string of decisions siding with churches and religious plaintiffs in recent years. This term, though, a plan to establish a publicly funded Catholic charter school lost after when the justices deadlocked after Amy Coney Barrett recused herself. The nine-member court is also considering a case over religious objections to books read in public schools. In those arguments, the majority appeared sympathetic to the religious rights of parents in Maryland who want to remove their children from elementary school classes using storybooks with LGBTQ characters. Whitehurst writes for the Associated Press.
