Islamic Center of Nashville v. State of Tennessee

ICN, a religious nonprofit, operates a Nashville mosque and a school. In 2008, it began building a new school building, financed by an ijara agreement, to avoid “running afoul of the Islamic prohibition on the payment of interest.” The bank essentially bought the property, leased it back to ICN, and then sold it back to ICN, with the lease payments substituting for interest payments. The agreement lasted until October 2013; the property was “continuously occupied by [ICN] and physically used solely for exempt religious educational purposes.” The transfer of title prompted the tax assessor to return the property to the tax roll. In February 2014, ICN applied for a property tax exemption, seeking retroactive application. The Tennessee State Board of Equalization’s designee regranted ICN's exemption, but not for the time during which the bank had held title. An ALJ and the State Board’s Assessment Appeals Commission upheld the decision. ICN did not seek review in the chancery court, but filed suit in federal court under the federal Religious Freedom Restoration Act; the federal Religious Land Use and Institutionalized Persons Act; the federal Elementary and Secondary Education Act; and the Establishment Clause. The court dismissed for lack of subject-matter jurisdiction, citing the Tax Injunction Act, 28 U.S.C. 1341. The Sixth Circuit affirmed. Tennessee’s statutory provision for state-court appeal provides a plain, speedy, and efficient alternative to federal-court review, so the Tax Injunction Act bars ICN’s suit in federal court. View "Islamic Center of Nashville v. State of Tennessee" on Justia Law