Wisconsin Supreme Court to Decide on Tax-Exempt Status for Catholic Charities After Supreme Court Ruling

What's happening

The Wisconsin Supreme Court is currently reviewing the future of the tax-exempt status for the Catholic Charities Bureau (CCB) following a significant ruling by the U.S. Supreme Court earlier this year. In June 2023, the nation’s highest court unanimously found that Wisconsin’s denial of tax-exempt status to CCB violated the organization’s First Amendment rights. This decision reversed a prior ruling by the Wisconsin Supreme Court, marking a major victory for advocates of religious liberty. The case now returns to the state court to determine how to implement the Supreme Court’s directive, with both sides submitting briefs on potential remedies.

The legal battle over CCB’s tax exemption dates back to 2016, when the organization sought an exemption from contributing to Wisconsin’s unemployment insurance system. The state initially rejected the request, arguing that CCB’s activities did not primarily serve a religious purpose. The dispute escalated through Wisconsin’s court system and eventually reached the U.S. Supreme Court. The high court’s ruling emphasized that the state’s denial constituted unconstitutional religious discrimination, as it treated CCB differently based on its religious character, violating the First Amendment’s protection against government interference in religious matters.

Following the Supreme Court’s decision, Wisconsin’s Democrat-led government has taken a broader approach by seeking to eliminate tax exemptions not only for CCB but for all religious and nonreligious organizations in the state. This move has raised concerns among CCB’s legal representatives, who argue that it undermines the intent of the Supreme Court’s ruling. Colten Stanberry, an attorney with the Becket Fund for Religious Liberty, which represents CCB, stated that the organization aims to help people efficiently and that the state should partner with rather than target such charitable groups. CCB serves as the philanthropic arm of the Diocese of Superior and provides various charitable services without requiring adherence to specific religious beliefs.

The Wisconsin Attorney General, Josh Kaul, has proposed two possible remedies in response to the Supreme Court’s ruling: either granting the tax exemption to CCB or eliminating the exemption entirely for all organizations. Kaul’s office argues that removing the exemption statewide would prevent potential harm to Wisconsin workers and align with legislative intent regarding unemployment insurance contributions. This proposal has sparked debate, with some conservative justices on the Wisconsin Supreme Court dissenting and urging compliance with the Supreme Court’s directive to extend the exemption to CCB specifically.

What's at stake

The Becket Fund has strongly opposed the state’s proposal to eliminate exemptions broadly, arguing that the Supreme Court’s decision clearly mandates extending the tax exemption to CCB alone. Eric Rassbach, Vice President and Senior Counsel at Becket, emphasized that the case involved a clear instance of denominational discrimination and cannot be interpreted to justify removing exemptions for all organizations. The ongoing legal wrangling highlights the tension between protecting religious freedom and addressing broader state policy concerns about tax exemptions and unemployment insurance funding.

The stakes in this case extend beyond CCB, as the Wisconsin Supreme Court’s decision will have significant implications for religious organizations operating in the state. A ruling in favor of CCB could reinforce protections for religious groups seeking government exemptions and limit state interference in their operations. Conversely, if the court sides with the state’s broader approach, it could lead to the elimination of tax exemptions for a wide range of organizations, potentially affecting their financial viability and ability to provide services. This outcome may also prompt further legal challenges, including a possible return to the U.S. Supreme Court.

As the Wisconsin Supreme Court reviews the case, it has directed the parties to file briefs by October 18, 2023, outlining appropriate remedial measures. The court’s decision is expected to clarify how the state must comply with the First Amendment protections affirmed by the U.S. Supreme Court. Legal experts and interested observers will be closely watching the proceedings, as the ruling will shape the balance between religious liberty and state regulatory authority in Wisconsin. The outcome will also influence how other states handle similar disputes involving tax exemptions and religious organizations.

Looking ahead, the Wisconsin Supreme Court’s ruling could come within the next several months, setting a precedent for how religious exemptions are treated under state law. Should the court reject the state’s proposal to eliminate exemptions broadly, Wisconsin may be required to reinstate CCB’s tax-exempt status promptly. If the court approves the broader elimination, the case may return to the U.S. Supreme Court for further review. This legal saga underscores ongoing national debates about the role of religion in public life and the limits of government authority over religious entities.

In the meantime, the Catholic Charities Bureau continues its charitable work in Wisconsin, serving communities without imposing religious requirements on its employees or service recipients. The organization’s future ability to operate without government interference hinges on the upcoming court decisions. Stakeholders across the state, including religious groups, policymakers, and taxpayers, will be monitoring the case closely, as it will influence the landscape of religious freedom and nonprofit operations in Wisconsin for years to come.

Why it matters

The Supreme Court ruled in favor of CCB earlier this year, affirming First Amendment protections. The Becket Fund argues the ruling requires extending the tax exemption specifically to CCB. Wisconsin’s government proposes eliminating tax exemptions for all organizations, raising legal and policy concerns.

The Wisconsin Supreme Court’s decision will determine how the state implements the Supreme Court’s directive. The outcome will affect religious organizations’ ability to operate without government interference in Wisconsin.

Key facts & context

The U.S. Supreme Court reversed the Wisconsin Supreme Court’s decision in June 2023, ruling in favor of CCB. The Wisconsin Supreme Court has ordered parties to submit briefs on remedial measures by October 18, 2023. CCB sought exemption from Wisconsin’s unemployment insurance contributions starting in 2016.

Wisconsin’s Attorney General Josh Kaul proposed either granting the exemption to CCB or eliminating it for all organizations. The Supreme Court found that denying CCB’s exemption violated the First Amendment’s protection against religious discrimination. The Becket Fund for Religious Liberty represents CCB in this legal dispute.

The Wisconsin government’s broader effort to remove exemptions has been criticized by CCB’s legal team. The case highlights tensions between religious liberty and state regulatory policies regarding tax exemptions. The Wisconsin Supreme Court’s ruling could prompt further appeals to the U.S. Supreme Court depending on the outcome.

CCB operates as the philanthropic arm of the Diocese of Superior, providing charitable services without religious tests.

Timeline & key developments

2025-11-04: Wisconsin Supreme Court to Decide on Tax Exemption for Catholic Charities Following SCOTUS Ruling. 2025-10-24: Wisconsin Supreme Court to Decide on Tax Exemption for Catholic Charities Following SCOTUS Ruling. Additional reporting on this topic is available in our broader archive and will continue to shape this timeline as new developments emerge.

Primary sources

• supremecourt.gov PDF
• acefiling.wicourts.gov document

Further reading & references

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