WASHINGTON – The Supreme Court voted Friday to hear a potentially sweeping religious freedom claim and decide whether church-sponsored charities, programs and companies can refuse to pay state unemployment taxes for their employees.
All states exempt churches and church programs from taxes if they “serve primarily religious purposes.” However, they typically require affiliated schools, colleges, hospitals and other businesses to pay unemployment taxes if they are open to all and do not offer religious services or religious instruction.
In a case from Wisconsin, The justices will reconsider that approach and decide whether to instead require states to defer to religious authorities. The Appeal that is heard, argued The government may not “challenge” the religious decisions of ecclesiastical authorities requesting an exemption.
The dispute began with Black River Industries, Barron County Developmental Services and two other small nonprofit companies funded by state or federal grants to provide services to people with developmental disabilities.
They are now controlled by Catholic Charities, which has applied for an exemption from unemployment taxes.
Their lawyers argued that these charitable programs were motivated by “sincere religious beliefs and the fulfillment of the religious mission” of the church.
So they said it was unconstitutional to require Catholic Charities to pay unemployment taxes, noting that the church has its own unemployment insurance program.
The Wisconsin Supreme Court disagreed with a 4:3 verdict and maintained state taxes. It said the four programs were “charitable” and “educational” but not primarily religious.
Lawyers for the Becket Fund for Religious Liberty appealed, asking the court to overturn the Wisconsin ruling.
The case is being heard by a Supreme Court that has repeatedly ruled in favor of religious claims over the past decade.
In a number of cases, the justices said churches and religious beneficiaries were entitled to equal government benefits, including grants to pay for playgrounds at a church school or tuition subsidies for parents to send their children to religious schools.
In another series of cases, religious organizations were exempted from government regulation of their employees.
Four years ago, for example, they ruled that two fired Catholic school teachers in Los Angeles could not sue on the grounds that they were victims of discrimination.
A year later, the court ruled that Catholic Social Services had the right, on religious freedom grounds, to participate in and receive payment for a city-sponsored foster care program in Philadelphia, even though it refused to work with same-sex couples as required by the city .
The court also ruled that private businesses such as Hobby Lobby stores and church-sponsored institutions had the right to deny contraceptive coverage to their employees under federal law.
In the Wisconsin case, a group of religious freedom scholars asked the court to rule that the government must “defer” to church authorities in matters affecting their organizations.
“This case is a serious government interference with religious freedom that strikes at the core of the most basic guarantees of the 1st Amendment.” they wrote in a friend of the court brief. They said: “Courts must rely on how the religious group defines its message.”
The Illinois Catholic Conference was among the church groups that urged the court to hear the case. Their brief states that their bishops speak for 949 parishes, 46 Catholic hospitals, 21 health centers, 11 colleges and universities, 424 schools and 527 Catholic cemeteries.
The court is expected to begin hearing the Wisconsin case in March or April and issue a ruling by the end of June.
“Wisconsin seeks to ensure that no good deed goes unpunished,” said Eric Rassbach, vice president and senior counsel at Becket. “Punishing Catholic Charities for serving Catholics and non-Catholics alike is ridiculous and wrong. We are confident the Supreme Court will reject the Wisconsin Supreme Court’s absurd ruling.”