The Supreme Court signaled Monday that it may side with a Catholic charitable organization in a case challenging Wisconsin’s refusal to grant a religious exemption from state unemployment taxes. The dispute, which could have broad implications for religious freedom and how states define religious activity, centers on whether the Catholic Charities Bureau should be considered a religious employer under state law.

Wisconsin exempts religious organizations from paying unemployment tax if their operations are primarily religious. However, state officials argue that the Catholic Charities Bureau does not qualify because its services — such as caring for the elderly and disabled — are not overtly religious or tied to proselytizing. The organization, which has paid the tax since 1972, contends that its work is rooted in Catholic values and mission, and that the state is unfairly judging what counts as religious activity.

This is a developing news story and will be updated as more information is available.

Reporting by the Associated Press contributed to this story.

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