Worthy Christian News > US News > Supreme Court to Decide if States Can Deny Religious Exemptions Based on ‘Religious Enough’ Standard

Supreme Court to Decide if States Can Deny Religious Exemptions Based on ‘Religious Enough’ Standard

by Worthy News Washington D.C. Bureau Staff

(Worthy News) – The U.S. Supreme Court is poised to deliver a landmark ruling that could redefine religious liberty and the limits of government authority over faith-based organizations. At the heart of the dispute is whether states can deny religious tax exemptions to faith-based nonprofits that don’t meet state-defined criteria for operating “primarily for religious purposes.”

The case, Catholic Charities Bureau v. Wisconsin Labor and Industry Review Commission, stems from a 2016 request by Catholic Charities Bureau of Wisconsin for an exemption from the state’s unemployment tax. The nonprofit, which provides services like job placement, disability support, and housing assistance–without requiring religious participation–argued that it should qualify as a religious organization under the state’s exemption rules.

However, the Wisconsin Supreme Court denied the exemption, ruling that Catholic Charities’ operations were not “religious enough,” largely because its programs did not involve proselytizing or require faith adherence. Catholic Charities appealed to the U.S. Supreme Court, contending that the ruling violates the First Amendment’s protection of religious freedom.

During oral arguments in March, several justices voiced skepticism over Wisconsin’s criteria. “I thought it was pretty fundamental that we don’t treat some religions better than other religions,” said Justice Elena Kagan. Justice Ketanji Brown Jackson added, “It just seems as though Wisconsin says we’re going to set up this system that is operating in a discriminatory fashion.”

Religious liberty advocates warn that the outcome could have sweeping implications for faith-based charities nationwide. Ryan Gardner, senior counsel at First Liberty Institute, emphasized the broader threat: “If the court affirms Wisconsin’s decision, it would allow the state to determine what counts as ‘religious,’ entangling the government in religious affairs–a violation of the very constitutional protections our founders sought to preserve.”

Catholic Charities and its legal allies–including Becket, the U.S. Conference of Catholic Bishops, and a coalition of Protestant and Latter-day Saint organizations–argue that religious organizations must be allowed to define their own practices. “The government shouldn’t be in the business of deciding whether a church’s charity is ‘religious enough’ to be protected by the Constitution,” said Becket attorney Nick Reaves.

Wisconsin officials, backed by the ACLU, American Atheists, and other secular groups, counter that their process respects constitutional boundaries. “Courts routinely deny religious tax exemptions to entities that assert religious motivations without entangling themselves in doctrine,” the state argued in its brief. “That doesn’t violate the church autonomy principle.”

The Supreme Court is expected to rule on the case by the end of June. The decision could reshape how states define religious purpose, determine exemptions, and navigate the balance between faith and public regulation. As Reaves noted, “This isn’t just about Catholic Charities. It’s about whether the state has the power to tell any religious group how religious it has to be.”

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