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Though not required to do so, Wisconsin has chosen to adopt a tax scheme which exempts many religious entities from its unemployment tax laws. The relevant tax statute does not apply to (1) churches, (2) organizations operated primarily for religious purposes that are closely affiliated with churches, and (3) individuals exercising ministerial functions.

In 2016, Catholic Charities Bureau (CCB) and its sub-entities sought an exemption from the state unemployment tax but were rejected by the Department of Workforce Development on the grounds that they are not 鈥渙perated primarily for religious purposes鈥� within the meaning of the statute. CCB appealed the ruling and were successful before an administrative law judge, but the state鈥檚 Industry Review Commission reversed.

CCB then turned to judicial review in state court. The trial court ruled in favor of CCB, but the Wisconsin Court of Appeals reversed that decision and reinstated the Industry Review Commission ruling. The Wisconsin Supreme Court affirmed the appellate court decision, concluding that the organizations were not eligible for the religious purposes exemption under state law. Subsequently, the U.S. Supreme Court agreed to hear the case.

Our amicus brief filed in the U.S. Supreme Court argued that CCB鈥檚 argument would have the Court adopt a legal regime that would effectively expand all religious exemptions that exist in every area of law to all entities and individuals who may claim a religious motive for their conduct.

In a June 2025 opinion, a unanimous court reversed the Wisconsin Supreme Court decision, holding that the state court鈥檚 interpretation of the tax statute violates the First Amendment.