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Tax- “Religious Purposes”


Tax- “Religious Purposes”


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WI Court of Supreme Court

Case Name: Catholic Charities Bureau, Inc. v. State of Wisconsin Labor and Industry Review Commission

Case No.: 2020AP002007


Focus: Tax- “Religious Purposes”

The petitioners, Catholic Charities Bureau, Inc. (CCB) and four of its sub-entities, seek an exemption from having to pay unemployment tax to cover their employees. They assert that they are exempt from coverage under Wisconsin’s Unemployment Compensation Act because they are operated primarily for religious purposes.

They assert that they are “operated primarily for religious purposes” because the Diocese of Superior’s motivation is primarily religious, i.e., their charitable works are carried out to operationalize Catholic principles. The petitioners further argue that a contrary interpretation would run afoul of the First Amendment to the United States Constitution and that as a result it also would violate Article I, Section 18 of the Wisconsin Constitution. On the other hand, LIRC advances that it is the organization’s actual activities, and not its motivations, that are paramount in the analysis. Under this formulation, LIRC contends the petitioners do not fulfill the religious purposes exemption because their activities are secular. Such an analysis, in LIRC’s view, does not violate the First Amendment or Article I, Section 18 of the Wisconsin Constitution. The supreme court determines that in its inquiry into whether an organization is “operated primarily for religious purposes” within the meaning of Wis. Stat. § 108.02(15)(h)2., it must examine both the motivations and the activities of the organization. Applying this analysis to the facts before us, it concludes that the petitioners are not operated primarily for religious purposes within the meaning of § 108.02(15)(h)2, and further concludes that the application of § 108.02(15)(h)2., as applied to the petitioners does not violate the First Amendment because the petitioners have failed to demonstrate that the statute as applied to them is unconstitutional beyond a reasonable doubt.


Decided 03/14/24

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