Supreme Court Decides Catholic Charities Bureau, Inc. v. Wisconsin Labor and Industry Review Commission

On June 5, 2025, the Supreme Court of the United States decided Catholic Charities Bureau, Inc. v. Wisconsin Labor and Industry Review Commission, No. 24-154, holding that Wisconsin’s denial of a tax exemption that covers nonprofits “operated primarily for religious purposes” and controlled, supervised, or principally supported by a church, Wis. Stat. § 108.02(15)(h)(2), to Catholic Charities Bureau, Inc., violated the First Amendment because it imposed a denominational preference on petitioners and did not survive strict scrutiny.

Petitioner Catholic Charities Bureau, Inc., is a nonprofit organization that serves as the social ministry arm of the Roman Catholic Diocese of Superior, Wisconsin. The Bureau’s stated mission is to “carry on the redeeming work of our Lord,” and it provides services to the poor and disadvantaged in Wisconsin. The Bureau oversees several separately incorporated entities, including some that provide charitable services, such as providing services to individuals with disabilities. The Roman Catholic Diocese of Superior exercises control over the Bureau and its related entities, but its employees and the recipients of petitioners’ services are not required to ascribe to a particular religious faith.

The Wisconsin Department of Workforce Development determined that the Bureau and its related entities did not qualify for a tax exemption under state law. Wisconsin law requires most employers to make regular contributions to the state’s unemployment fund through payroll taxes, but religious employers are exempt from making those contributions. Relevant to this case, the exemption covers nonprofit organizations “operated, supervised, controlled, or principally supported by a church or convention or association of churches” if the organizations are “operated primarily for religious purposes.” Wis. Stat. § 108.02(15)(h)(2). The Department determined that the exemption did not apply because the Bureau and its entities were not “operated primarily for religious purposes” under the statute.

Petitioners appealed through the state administrative and judicial systems, and the Wisconsin Supreme Court ultimately held that petitioners were not “operated primarily for religious purposes.” Central to that conclusion was a finding that the Bureau did not attempt to convert or educate recipients in the religious faith, and that their services could be offered by religious or secular organizations. The Supreme Court granted certiorari to decide whether Wisconsin’s statutory exemption as applied by the Wisconsin Supreme Court violated the First Amendment.

The Supreme Court concluded that the failure to apply the exemption on these facts violated the First Amendment. It explained that the Wisconsin Supreme Court’s application of the tax exemption was denominational discrimination because the court’s inquiry turned on whether the petitioners proselytized or limited their services to only serving Catholics — criteria that the petitioners explained would violate their Catholic faith, which forbids “misus[ing] works of charity for purposes of proselytism” or limiting services based on a recipient’s religion. The Court concluded that the tax exemption, as interpreted by the Wisconsin Supreme Court, granted a denominational preference based on differences among religions’ theological practices.

Given that the statute had been applied discriminatorily, the Supreme Court then applied strict scrutiny, which requires a compelling government interest and that the law is narrowly tailored to further that interest. The Court held that Wisconsin’s statutory exemption, as applied to petitioners, was not narrowly tailored to further the state’s stated interests in ensuring unemployment coverage for its citizens and avoiding entangling the state with employment decisions touching on faith and doctrine. The state therefore failed to meet its burden under strict scrutiny.

Justice Sotomayor delivered the opinion of a unanimous Court. Justices Thomas and Jackson filed concurring opinions.