U.S. Supreme Court examines Wisconsin’s denial of Catholic charity tax exemption

Washington, D.C. Newsroom, Mar 31, 2025 / 16:40 pm

Several U.S. Supreme Court justices across ideological lines during oral arguments Monday morning expressed concerns about a Wisconsin agency’s refusal to legally recognize a Catholic charity — run by the Diocese of Superior — as a religious organization.

The dispute between Catholic Charities Bureau (CCB) and the Wisconsin Labor and Industry Review Commission (LIRC) will determine whether the charity is required to pay taxes into the state’s unemployment system or whether the organization can enroll workers in the Church-run unemployment system and avoid the tax.

State law allows organizations “operated primarily for religious purposes” to qualify for the tax exemption if it provides its own unemployment system. Yet, the LIRC asserts that CCB is not operated primarily for a religious purpose because it offers charitable services to people of all faiths and does not focus its efforts on converting the people it serves to Catholicism.

Religious freedom advocates have warned that the denial of CCB’s recognition as a religious entity could have a ripple effect that leads to the denial of other legal rights afforded to religious organizations, such as exemptions from mandates that conflict with an organization’s religious beliefs.

Justices challenge Wisconsin’s position

Colin Roth, assistant attorney general for the Wisconsin Department of Justice, told the justices during the March 31 oral arguments that CCB functions similar to a secular charity because of the lack of proselytization — a position that was challenged by justices who were appointed by both major political parties.

When justices repeatedly pressed Roth to give examples of what sort of “proselytization” would qualify CCB for an exemption, he suggested that asking patrons to “please repent” or “please join our religion” while delivering services would likely be sufficient.

In a more specific example, Roth said instructing a patron to say the Lord’s Prayer with a worker or volunteer while receiving food at a soup kitchen would add the proselytization component.

“That type of job function is tethered to religious doctrine,” Roth said.

Justice Clarence Thomas, who is Catholic, asked Roth why expressing the statement “we believe deeply in the corporal works of mercy” wouldn’t be sufficient, adding: “Why is there a difference?”

Roth acknowledged that charity is essential to the Catholic faith but said the corporal works of mercy are “not expressing or inculcating religious doctrine.”

Justice Amy Coney Barrett, who is Catholic, and Justice Elena Kagan, who is Jewish, both emphasized that proselytization is not a component of all religious acts and not even part of some religions.

Barrett noted that many sects of Judaism do not “have that as a component” and the standard supported by Wisconsin “will inevitably exclude certain religions.” Kagan agreed, saying it is “fundamental” that the government does not “treat some religions better than other religions” but that Wisconsin’s standard “puts the state on the side of some religions.”

“Why are we treating some religions better than others based on that element of religious doctrine?” Kagan asked.

Roth defended Wisconsin’s position, arguing that it is not just “proselytization” that would make an organization eligible for a tax exemption here, but also if it engages in “worship” or “religious education.” 

“These are ‘ors,’” Roth said. “These are not ‘ands.’”

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However, Roth emphasized that simply showing that an act is motivated by religion “does not render you eligible for the exemption.”

Eric Rassbach, a vice president and senior counsel at the Becket Fund for Religious Liberty, represented CCB at the Supreme Court. 

“Wisconsin draws distinctions along theological lines — something that this court has repeatedly forbidden,” he argued.

Rassbach said the standard supported by Wisconsin would force CCB to operate its charity in an “almost coercive way” by “using [food and services] to influence people, to take advantage of people, and to exploit them.” He argued the religious exemption was denied because “they serve non-Catholics, they hire non-Catholics, and because they do not proselytize.”

“Mother Teresa might not qualify,” Rassbach said.

Where does the line get drawn?

Although the justices appeared unified in their concerns about Wisconsin’s narrow interpretation for what qualifies as a “religious purpose,” they also raised numerous questions about where the line should be drawn on what does qualify as a “religious purpose.”

Justice Ketanji Brown Jackson, who is a nondenominational Protestant, raised the question of whether such exemptions would extend to a for-profit vegan restaurant launched by a minister in a religion that opposes the consumption of meat.

Barrett similarly raised the possibility of a religious institution requesting tax exemptions for the creation of a for-profit business to raise money to benefit its members or other people, asserting it “is essential to its religious mission.”

Some of the justices also expressed a need to differentiate between a religious motivation and a philosophical motivation and to have an understanding of what constitutes religion and religious belief.

Rassbach expressed some sympathy for those concerns, saying that his position was not for “limitless exemptions” without any standards. He suggested that the test should be for courts to determine whether something is motivated by a “duty that we owe and the means of discharging it.”

Barrett stated that one of the problems for the court is “figuring out what the line is.”