The Supreme Court on Thursday ruled in favor of a Wisconsin-based Catholic charity in a case concerning unemployment tax credits for religious organizations, marking a win for faith-based institutions that argued the state’s actions violated the First Amendment’s religious protections.

In a unanimous decision, the justices found that the state had created an “unnecessary entanglement” by attempting to determine a religious group’s eligibility for the tax exemption based on its own standards for what constitutes religious activity.

“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,” Justice Sonia Sotomayor said, writing for the majority.

“Because Wisconsin has transgressed that principle without the tailoring necessary to survive such scrutiny, the judgment of the Wisconsin Supreme Court is reversed, and the case is remanded for further proceedings not inconsistent with this opinion,” she added.

The Wisconsin Supreme Court had previously ruled that the Catholic Charities group in question was not “operated primarily for religious purposes,” since it serve and employs non-Catholics, and does not “attempt to imbue program participants with the Catholic faith.”

In other decisions, the justices also unanimously ruled to toss Mexico’s lawsuit against the American gun industry over violence committed by cartels.

The Court ruled in Smith & Wesson Brands v. Estados Unidos Mexicanos that the Protection of Lawful Commerce in Arms Act, which shields gun manufacturers from liability, does not contain exceptions allowing the Mexican government to pursue legal action against them.

“The kinds of allegations Mexico makes cannot satisfy the demands of the statute’s predicate exception,” Justice Elena Kagan wrote for the court.

Kagan noted the exceptions in the law would allow a lawsuit against the gun makers if they “proximately caused” Mexico harm.

“Mexico’s complaint, for the reasons given, does not plausibly allege such aiding and abetting,” Kagan wrote. “So this suit remains subject to PLCAA’s general bar: An action cannot be brought against a manufacturer if, like Mexico’s, it is founded on a third party’s criminal use of the company’s product.”