Written by Don Byrd

A Wisconsin federal judge has, for the second time, ruled unconstitutional the tax exemption for ministers’ income designated as a housing allowance. 

In 2014, the 7th Circuit Court of Appeals reversed Judge Barbara Crabb’s similar ruling, dismissing the case on the grounds that the plaintiffs lacked the standing to bring the suit in the first place. As a result, the appeals court did not rule on the question of whether the tax exemption violates the Establishment Clause, as Judge Crabb determined.

Faced with a similar claim from different plaintiffs, she unsurprisingly reached the same result last week, holding that the tax exemption found in Section 107(2) of the tax code runs afoul of the separation of church and state.

Here is an excerpt from the conclusion of her opinion:

[A]ny reasonable observer would conclude that the purpose and effect of § 107(2) is to provide financial assistance to one group of religious employees without any consideration to the secular employees who are similarly situated to ministers. Under current law, that type of provision violates the establishment clause.

In reaching this conclusion, I do not mean to imply that any particular minister is undeserving of the exemption or does not have a financial need for one. The important point is that many equally deserving secular employees (as well as other kinds of religious employees) could benefit from the exemption as well, but they must satisfy much more demanding requirements despite the lack of justification for the difference in treatment.

Judge Crabb stopped short of issuing an injunction halting enforcement of the tax exemption and instead asked the parties for supplemental briefing by October 30 about the appropriate remedy in light of her ruling. The Associated Press reports on the decision here.