Supreme Court rules Wisconsin unconstitutionally discriminated against Christian charity

The Supreme Court on Thursday sided with a Wisconsin-based Catholic charity group in a case centered on unemployment tax credits for religious institutions – delivering a victory for faith-based institutions, who argued that the state’s decision had violated the religious clauses under the First Amendment. 

In a unanimous opinion, the justices agreed that the state had engaged in an “unnecessary entanglement” in attempting to define whether religious groups should be entitled to an otherwise-available tax exemption based on the state’s criteria for religious behavior.

“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,” Justice Sonia Sotomayor said, writing for the majority.

“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.”

The decision could clear the way for more states to broaden their tax-exempt status for religious organizations, with ripple effects that could stretch far beyond Wisconsin. 

The Catholic Charities Bureau asked the Supreme Court to review a lower court ruling that had required them to pay Wisconsin’s unemployment tax, after the state determined the group’s activities were “primarily charitable and secular,” and therefore not subject to the exemptions.

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