WASHINGTON − The Supreme Court is set to determine if the charitable operations of a Catholic diocese qualify as religious enough to avoid paying unemployment taxes. This case has garnered significant interest from religious organizations nationwide.

The case under review involves Catholic Charities Bureau and four separate organizations that are under the diocesan control in Wisconsin, which provide support to individuals with developmental and mental health challenges.

Similar to other states, Wisconsin’s unemployment tax exemption is granted to organizations that are “operated primarily for religious purposes and administered, controlled, or primarily sustained by a church or a group of churches.”

In a decision reached by a 4-3 vote, the Wisconsin Supreme Court concluded that these organizations must contribute to the state’s unemployment fund as they do not operate chiefly for religious ends, despite their services being motivated by religious beliefs.

The individuals availing themselves of these services are not provided with religious education, and the employees are not required to be Catholic.

Additionally, these organizations do not receive financial support from the diocese. Their offerings—such as job training, placement, and coaching—can be delivered by either religious or secular organizations, as affirmed by the state Supreme Court, which noted that the nature of the services would remain unchanged in both contexts.

Wisconsin Supreme Court Justice Ann Walsh Bradley, writing for the majority, stated, “If we solely considered the church’s intent in running the organization, then any religiously affiliated entity would invariably qualify for an exemption.”

However, attorneys from the Becket Fund for Religious Liberty, who are representing the diocese, contend that Justice Walsh’s comments are essentially saying that it “doesn’t matter if Catholic Charities provides a cup of water in the name of Jesus, because non-religious charities can offer water too.”

Eric Rassbach, the vice president and senior counsel at Becket, expressed when they filed the appeal, “It shouldn’t require a theologian to recognize that aiding the poor is intrinsic to Catholic beliefs. Yet, the Wisconsin Supreme Court arrived at the unreasonable conclusion that Catholic Charities lacks a religious purpose. We urge the Supreme Court to correct this error.”

Wisconsin Attorney General Joshua Kaul asserted that there was no error in the ruling.

In his response to the high court, Kaul said the Wisconsin Supreme Court correctly interpreted a neutral state law that “does not impose a significant constitutional burden on their religious practices.”

He added, “Courts regularly deny tax exemptions for religious entities that claim religious motivations without becoming overly involved in religious affairs.”

The case, identified as Catholic Charities Bureau v. Wisconsin Labor and Industry Review Commission, is anticipated to be resolved by the summer.