Should a local or state government tax Catholic Charities? That was the question brought to the U.S. Supreme Court recently. In “Catholic Charities Bureau v. Wisconsin Labor and Industry Review Commission (2025),” the Supreme Court ruled that the state violated the Constitution when it refused to provide the same exemption from the state’s unemployment tax which it gives to other religious groups.
As Chief Justice Clarence Thomas argued: “The First Amendment’s guarantee of church autonomy gives religious institutions the right to define their internal governance structures without state interference… Religious institutions may create different corporate entities to help manage their temporal affairs, but those entities do not define the broader religious institution’s internal structure.”
The state of Wisconsin argued that Catholic Charities was not a part of the Catholic Church because it did not proselytize. Therefore, it did not qualify for exemption from state unemployment taxes. As we know, it is part of the very mission of the Church to help the poor and needy. The Church does this in many ways, most especially through Catholic Charities. At the same time, it does not condition aid on a person’s membership in the Church nor does it force people to convert. Evangelization is not proselytization. Under Wisconsin logic, in order for Catholic Charities to be considered part of the Church, it would have to proselytize. Fortunately, in a 9-0 ruling, the justices argued that it is not up to the state to determine religious doctrine nor internal structures.
