## Facts

- Catholic Charities Bureau, Inc. (CCB) operated as the social-service ministry of the Roman Catholic Diocese of Superior, Wisconsin, under diocesan control.
- Four affiliated nonprofits provided services to people with disabilities, including job coaching, daily living assistance, and related supports.
- Wisconsin’s unemployment compensation law generally covered nonprofit employers but exempted certain church-related nonprofits “operated primarily for religious purposes” and “operated, supervised, controlled, or principally supported by a church.”
- CCB and its affiliates sought the exemption; the state workforce agency denied it, an administrative law judge granted it, and the Wisconsin Labor & Industry Review Commission (LIRC) ultimately denied it again.
- Wisconsin courts upheld LIRC, reasoning the organizations were not “operated primarily for religious purposes” because they did not proselytize, did not limit services to Catholics, and performed work similar to secular social-service providers.
- The U.S. Supreme Court granted review to determine whether Wisconsin’s criteria for “religious purposes” violated the First Amendment.

## Issues

1. Whether the First Amendment permits a state to deny an otherwise available tax exemption to a religious organization because it does not engage in proselytization or restrict services to co-religionists.
2. Whether Wisconsin’s interpretation and application of the “operated primarily for religious purposes” exemption created an unconstitutional denominational preference triggering strict scrutiny.
3. If strict scrutiny applies, whether Wisconsin’s approach was narrowly tailored to serve a compelling governmental interest.

## Decision

- The Supreme Court reversed the Wisconsin Supreme Court and held that Wisconsin’s denial of the exemption violated the First Amendment.
- The Court concluded Wisconsin’s test imposed a denominational preference by conditioning eligibility on “particular theological practices,” such as proselytizing or serving only co-religionists.
- Because the state distinguished among religions based on theological differences in how charitable services are provided, strict scrutiny applied.
- Wisconsin’s asserted administrative interests did not justify using theology-based criteria; the state could pursue its goals through neutral, secular criteria.
- The case was remanded for further proceedings consistent with the Court’s requirement of theologically neutral administration of the exemption.

## Legal Principles

- Government must remain neutral among religions; laws or applications that create denominational preferences are subject to strict scrutiny.
- Conditioning public benefits or tax exemptions on whether a religious organization engages in specific religious practices (e.g., proselytization or limiting beneficiaries to adherents) is an unconstitutional theological line-drawing.
- A state may administer religious exemptions using neutral, secular criteria, but may not require civil authorities to assess the religious content, sufficiency, or “realness” of an organization’s religious purposes.
- Under strict scrutiny, administrative convenience and generalized concerns about program integrity cannot justify discrimination among religions based on theological practice when neutral alternatives are available.

## Conclusion

The Court held that Wisconsin violated the First Amendment by denying a church-controlled charity an unemployment-tax exemption because it did not proselytize or restrict services to Catholics, requiring states to apply religious-purpose exemptions without theology-based distinctions among religious organizations.


Catholic Charities Bureau, Inc. v. Wisconsin Lab. & Indus. Rev. Comm’n, 605 U.S. ___ (2025)