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Nashville mosque sues over tax exemption denial

Holly Meyer, and Stacey Barchenger
The Tennessean
Gavel.

The Islamic Center of Nashville is suing the state in federal court for denying a retroactive property tax exemption under a law the center says discriminates and creates an unfair burden based on religion.

The lawsuit filed Monday in the U.S. District Court for the Middle District of Tennessee argues the center's religious tax exemption for its Nashville International Academy school was denied because of a banking deal that allowed the Islamic center to follow its religious beliefs. The center was billed more than $87,000 in past-due taxes as a result, according to court filings.

The Islamic center says Tennessee's law violates several federal protections for religious liberty and expression, including those in the First Amendment.

"Defendants have caused undue substantial financial burdens on (Islamic Center of Nashville), and the school operated on its premises, which are not imposed on other religions or other schools," the lawsuit states.

In 2008, the 12South mosque built a new school building on Charlotte Pike. Since the Islamic center adheres to Islam's prohibition against paying interest, it struck a banking agreement known as an ijara, or ijarah, to pay for the construction without interest, the lawsuit states.

The arrangement transferred the property's title to a bank until October 2013 when the Islamic center paid its final payment. That transfer is what led to the denial of the Islamic center's retroactive exemption request, the lawsuit states.

“Officials did not pursue tax collection until they saw that the ijarah agreement involved a title transfer, despite the fact that the property was being used for tax-exempt purposes all along,” said Christina Jump, an attorney representing the mosque. “We believe the Tennessee statute is unconstitutional because it imposes a burden on Muslim institutions that it does not place on those of any other faith community.”

Metro Nashville Trustee Charlie Caldwell and the Tennessee State Board of Equalization are also defendants in the lawsuit. A state spokesman said he could not comment on pending litigation.

The Islamic center first appealed the denial to an administrative law judge and the Assessment Appeals Commission. In May, the commission said the transfer of title disqualified the center from the exemption, citing Tennessee law. It also said it sympathized with the mosque and suggested legislative action as a remedy.

The center is now asking a federal judge to intervene. The lawsuit requests damages and asks a judge to say the center does not have to pay the taxes.

In court filings, the center explains the harm done.

The mosque paid the pro-rated 2013 taxes of more than $22,000, but that money was earmarked for facility repairs and renovations, the lawsuit states. The Islamic center also needs to raise money for its more than $65,000 tax bill for 2012, which it says steers fundraising efforts away from security and youth programming.

The center is represented by Jump and Charles Swift, Texas lawyers at the non-profit Constitutional Law Center for Muslims in America. According to its website, the organization represents individuals and Islamic groups in cases in which religious discrimination is a possible issue. It is funded by the Muslim Legal Fund of America.

Khalil Meek, executive director of the legal fund, said that the case could have nationwide impact.

“If one state can pass or interpret laws that punish Muslims for following their faith, then other states can easily follow suit,” Meek said in a press release. “This is of great concern, especially in the times of heightened anti-Muslim rhetoric and with several states having already passed laws aimed at disenfranchising their Muslim populations.”

Nashville International Academy began in 1995 and offers pre-kindergarten through eighth grade instruction. It received AdvancEd Accreditation in 2013, the school's website states. The Islamic center and the academy operate independently, but are overlapping nonprofits, the lawsuit states.

Reach Holly Meyer at 615-259-8241 and on Twitter @HollyAMeyer. Reach Stacey Barchenger at 615-726-8968 or on Twitter @sbarchenger.