The Supreme Court unanimously ruled in favor of a Catholic charity that sued Wisconsin after it was mandated to pay certain unemployment taxes while other religious organizations were exempted.
In its ruling, the court struck down a decision from the Wisconsin Supreme Court that said the Catholic Charities Bureau had to pay taxes on unemployment compensation. The court said that the interpretation of state tax law by Wisconsin’s Supreme Court violated the First Amendment.
“The First Amendment mandates government neutrality between religions and subjects any state-sponsored denominational preference to strict scrutiny,” Justice Sonia Sotomayor wrote in the majority decision. “The Wisconsin Supreme Court’s application of [Wisconsin law] imposed a denominational preference by differentiating between religions based on theological lines.”
Catholic Charities Bureau is an organization that provides services to poor people, the disabled, the elderly, and children with special needs as a ministry of the Catholic Church in the Diocese of Superior. According to its website, it provides around 50 programs to over 10,500 people.
Justice Clarence Thomas wrote a concurring opinion, saying that in addition to violating the First Amendment, the Wisconsin Supreme Court violated the church autonomy doctrine, which means that a religious institution is not defined by any corporate entity it may form.
“I would reverse for an additional reason — that the Wisconsin Supreme Court violated the church autonomy doctrine,” Thomas wrote. “However incorporated, Catholic Charities and its subentities are, from a religious perspective, a mere arm of the Diocese of Superior. The Wisconsin Supreme Court should have deferred to that understanding, and its failure to do so amounted to an unlawful attempt by the State to redefine the Diocese’s internal governance.”
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Thomas noted that the government could not use entities created by religious institutions as a backdoor means to regulate their internal governance.
“In short, the corporation is made for the church, not the church for the corporation. Both the basic principles of church autonomy and the history of religious corporations establish that religious institutions are more than the corporate entities that they form,” he wrote. “It follows that the government may not use such entities as a means of regulating the internal governance of religious institutions.”
Justice Ketanji Brown Jackson also issued a separate concurring opinion.
