Discrimination

Supreme Court Rules for Catholic Charity in Tax Exemption Case

Published JUN 5 2025

Story

Above: People walk in front of the U.S. Supreme Court on June 5, 2025, in Washington, D.C., U.S. Image credit: Andrew Harnik/Staff/Getty Images News via Getty Images

The Facts

The U.S. Supreme Court (SCOTUS) unanimously ruled Thursday that Wisconsin violated the First Amendment by denying a Catholic charity tax exemptions from state unemployment insurance, calling it "denominational discrimination" by distinguishing religions "based on theological differences in their provision of services."
NBC
Foxnews
Supremecourt
Ncronline
Catholic Charities Bureau, the social ministry arm of the Diocese of Superior in Wisconsin, was denied religious exemption from unemployment taxes because state officials determined its activities were "primarily charitable and secular" rather than religious, despite serving over 10,500 people through 50 programs.
Daily Wire
NBC
Supremecourt
The Wisconsin Supreme Court had ruled 4-3 in March that Catholic Charities did not qualify for exemption because it serves and employs non-Catholics and does not attempt to proselytize or "imbue program participants with the Catholic faith," making its work essentially secular in nature.
The New York Times
The Hill
Christian Post
Justice Sotomayor noted that Catholic doctrine actually prohibits "misus[ing] works of charity for purposes of proselytism," meaning Wisconsin's exemption criteria created unconstitutional denominational preferences by favoring religions that proselytize over those that do not.
CNN
Christian Post
Justice Clarence Thomas wrote a separate, concurring opinion arguing that the Wisconsin Supreme Court also violated the "church autonomy doctrine" by failing to recognize that Catholic Charities is simply "an arm of the Diocese" regardless of its separate corporate structure.
Daily Wire
The New York Times
The Hill
The decision could have nationwide implications, as 47 states and the federal government include similar religious exemptions from unemployment taxes, potentially expanding eligibility for religious tax exemptions beyond traditional church organizations to affiliated charitable entities.
CNN
The Hill
Foxnews

Sources Split

LEFT

CENTER

RIGHT

ESTAB
CRIT

CENTER

PRO
ESTAB

The Spin

Narrative A

This ruling is a triumph for religious freedom, Catholic charity workers, and the nation. By overturning Wisconsin's discriminatory policy, the Court upheld the First Amendment's mandate of government neutrality between religions. This protects Catholic Charities' mission to serve all, reflecting Christ's call to aid the poor, and ensures the state cannot discriminate based on theological differences.

NCR

The Daily Signal

Narrative B

This ruling undermines workers' rights and state-church separation. By granting a tax exemption to Catholic Charities, despite their secular services and public funding, the Court risks stripping unemployment protections from countless nonreligious employees at similar nonprofits. This decision favors religious privilege over equal treatment, threatening vulnerable workers and eroding constitutional neutrality.

Freedom From Religion Foundation