SCOTUS Weighs If States May Tax Catholic Charities, Religiously Affiliated Groups
In a case that some critics argue could put at risk the unemployment benefits of over a million American workers, the Supreme Court is set to hear arguments on Monday about whether states can require religiously affiliated organizations, such as Catholic Charities, to pay unemployment taxes.
The Catholic Charities Bureau and four of its affiliated groups contend that Wisconsin violated the First Amendment’s religious protections by denying them an exemption from these taxes. This marks the first appeal focused on religious rights that the conservative-leaning 6-3 Supreme Court has taken up in nearly two years, CNN reported.
In recent years, conservative justices have weakened the traditional separation between church and state, asserting that certain government efforts to uphold the First Amendment’s establishment clause have been overly broad and discriminatory against religion.
The court has expanded circumstances where taxpayer funds can support religious schools. For instance, it ruled that Boston could not prohibit a Christian organization from flying a flag at City Hall and allowed a public high school football coach to pray on the 50-yard line.
Religiously affiliated organizations have flooded the Supreme Court with petitions for relief.
A decision, expected by the end of June, could have significant consequences if it extends to hospitals and other religiously linked entities. It may also make it more challenging for the government to determine whether an organization is genuinely religious or merely using religious claims to avoid taxes.
“Taking religious organizations at their word on the religiousness of their activities makes it hard for the government to challenge if those activities are actually religious,” said Luís Calderón Gómez, a professor specializing in tax law at the Benjamin N. Cardozo School of Law at Yeshiva University.
“You open the doors for abuse when you just look at whether there’s a sincerely held belief rather than actually looking at the activity” the business is engaged in, Calderón Gómez added.
Churches are already exempt from most taxes. The court must now determine whether an organization like Catholic Charities, which is affiliated with the Roman Catholic Church’s diocese but does not engage in proselytizing, should receive the same exemption.
As the “social ministry arm of the Diocese of Superior” in Wisconsin, the Catholic Charities Bureau asserts that it conducts a “wide variety of ministries for the elderly, the disabled, the poor,” and other vulnerable groups.
“Wisconsin has denied Catholic Charities a religious exemption that the state freely extends to other religious organizations based on the absurd view that Catholic Charities’ aid to the needy isn’t actually religious at all,” the group’s attorneys argued before the Supreme Court.
Catholic Charities and its affiliates are represented by the Becket Fund for Religious Liberty, which has a history of advocating for religious groups in legal battles.
The organization assured that while its employees would still receive unemployment insurance, it would be managed by a church-affiliated provider instead of the government. However, opponents argue that employees in other sectors might not have the same security.
Across the U.S., 47 states and the federal government already exempt religious organizations from unemployment taxes, meaning the Supreme Court’s decision could have widespread implications.
Supporting Wisconsin’s stance, the Freedom from Religion Foundation submitted a brief highlighting that six multibillion-dollar Catholic-affiliated healthcare systems employ approximately 787,000 workers. Additionally, the Service Employees International Union, backing the state, estimates that religiously affiliated organizations employ over a million individuals.
Wisconsin informed the Supreme Court that Catholic Charities has participated in its unemployment insurance program without issue since 1971.
“If the First Amendment did not allow religious accommodations to be tailored to particular religious groups on a nondenominational basis, legislatures (and courts) would have to choose between exempting all religious groups or none at all,” Wisconsin officials stated in their argument to the high court.
With the conservative majority on the Supreme Court having consistently ruled in favor of religious organizations in recent cases, Catholic Charities is expected to have an advantage in Monday’s hearing.
In a landmark 2017 decision, the conservative justices found that Missouri had acted unconstitutionally by excluding Trinity Lutheran Church from a grant program that funded playground resurfacing for nonprofit organizations.
Three years ago, the court further expanded this principle in a ruling that struck down Maine’s policy of excluding religious schools from a tuition assistance program for parents in rural areas.
“A state’s antiestablishment interest does not justify enactments that exclude some members of the community from an otherwise generally available public benefit because of their religious exercise,” Chief Justice John Roberts wrote for the 6-3 majority.