This past June, Catholic Charities Bureau won a decisive victory over the Wisconsin Labor & Industry Review Commission at the U.S. Supreme Court after being denied a religious exemption from unemployment tax. The Court unanimously reversed the Wisconsin Supreme Court’s decision in favor of the state, holding that the state unemployment tax law violated the denominational neutrality required by the Religion Clauses of the First Amendment.
The dispute began in 2016 when Catholic Charities Bureau (CCB) applied for Wisconsin’s religious exemption. The Wisconsin Labor & Industry Review Commission (state commission) denied CCB the exemption on the grounds that the services CCB offered were secular in nature, serving people of all faiths without explicit evangelism efforts. The June 2025 unanimous decision from the U.S. Supreme Court remanded the case to the Wisconsin Supreme Court for entry of appropriate relief consistent with the former’s decision. Rather than abiding by the U.S. Supreme Court decision, the state commission urged the state supreme court to order new briefing and suggested that the appropriate relief would be for the Wisconsin Supreme Court to delete all 40 exemptions from the Wisconsin’s state tax law, including the one the U.S. Supreme Court found violated the First Amendment. Rather than give CCB the exemption it won before the U.S. Supreme Court, the state commission would prefer all the exemptions in Wisconsin’s state tax law be stricken from the books.
The Center for Law & Religious Freedom, which had previously filed an amicus brief in support of CCB before the U.S. Supreme Court, filed an amicus brief with the Wisconsin Supreme Court urging that court to follow the decision of the U.S. Supreme Court and include CCB in the statutory exemption and not eliminate all 40 statutory exemptions in its state unemployment tax law.
