by Worthy News Washington D.C. Bureau Staff
(Worthy News) – In a major victory for religious liberty, the U.S. Supreme Court unanimously ruled Thursday that the state of Wisconsin unconstitutionally discriminated against a Catholic charity by denying it tax exemptions available to other religious organizations.
At the heart of the case was a Wisconsin-based Catholic Charities group that had been denied unemployment tax credits typically granted to faith-based institutions. The state had argued that the charity did not qualify because it did not “operate primarily for religious purposes,” citing its employment of non-Catholics and its failure to directly proselytize clients.
In a 9-0 decision authored by Justice Sonia Sotomayor, the Court rejected the state’s rationale, stating that Wisconsin’s actions violated the First Amendment by drawing impermissible distinctions between religious organizations.
“When the government distinguishes among religions based on theological differences in their provision of services, it imposes a denominational preference that must satisfy the highest level of judicial scrutiny,” Sotomayor wrote.
The Court found that Wisconsin engaged in “unnecessary entanglement” by attempting to judge the charity’s religious authenticity through its service methods, a practice the justices warned could lead to unconstitutional government oversight of faith-based missions.
The ruling overturns a decision by the Wisconsin Supreme Court, which had sided with the state. That court previously determined that the Catholic organization did not qualify for the exemption because it served a broad public audience and did not “attempt to imbue program participants with the Catholic faith.”
The Supreme Court reversed that judgment and remanded the case for further proceedings, asserting that the state’s test imposed a religious litmus test not permissible under the Constitution.
The ruling delivers a significant victory for faith-based institutions, many of whom had feared that such state-level decisions would set a precedent allowing governments to narrowly define what qualifies as “religious” activity.
Copyright 1999-2026 Worthy News. This article was originally published on Worthy News and was reproduced with permission.
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