Legal Issue(s): NA
Case Description
How should the state decide whether a nonprofit is religious enough to qualify for tax exempt status? In Catholic Charities Bureau v. Wisconsin Labor and Industry Review Commission, the state told Catholic Charities (CCB) it did not qualify for the state’s unemployment tax exemption. Why? They claim that CCB services can be taxed because a) such services could be delivered by any similar organization that had no religious mission or affiliation, and b), CCB doesn’t proselytize!
This is a straight up fight over the state using taxes to tell religious ministries how to be properly “religious.”
It seems reasonable for the state to have a standard to know who does or does not qualify for this tax-exempt benefit, but by inserting its own criteria based on behavior that makes sense to it, Wisconsin has violated the higher constitutional test for burdening religious exercise rights.
It’s true that both faith-based and “secular” organizations may each feed the poor or house the homeless; however, the government cannot flatten the religious views that motivate a faith-based organization to carry out what it views as essential to the exercise of its faith—including that, like the Good Samaritan, the organization does not ask for people’s religious views to be served nor do they always share the gospel verbally.
Yet, because Catholic Charities serves in the manner of the Good Samaritan, the Wisconsin Supreme Court has axed its tax-exempt status unless or until they add other religious behaviors the state deems recognizable.
This does not pass the long-standing protections afforded in the First Amendment. CLS has offered a compelling amicus brief to urge the U.S. Supreme Court to overturn the Wisconsin decision and restore the full protections of the religious Free Exercise Clause.
Read the full Catholic Charities Bureau amici brief here.
