Muslim Group Sues Tennessee Over Tax Exemption Denial

Attorneys Say State Officials are Punishing Muslims for Following their Faith, Advocates Say Case Impacts Religious Freedom

DALLAS – Sept 20, 2016 – Representatives from Muslim Legal Fund of America, a nonprofit civil liberties legal fund, said the organization is funding a lawsuit against the State of Tennessee after state officials denied the tax exempt status application of a Muslim nonprofit because it entered into an Islamic compliant loan agreement (Case No. 3:16-cv-02498).

Islamic Center of Nashville entered into an “ijarah” agreement with a lending institution to pay for construction of a new school building. An ijarah agreement is a type of loan that does not violate Islam’s prohibition against dealing in interest. Islamic institutions and Muslim individuals enter into these agreements out of their sincerely held religious belief that usury is a major sin.

Under the ijarah agreement, the financial institution received legal transfer of title to the building in 2008 until ICN finished all payments as agreed in October 2013. The title was then transferred to ICN.

During the loan period, the financial institution did not pay taxes on the property, which ICN was using for religious and educational purposes. ICN applied for property tax exemption in February 2014 for the new building to be applied retroactively as allowed by Tennessee law. However, state officials denied ICN’s application to apply tax exemption retroactively and billed the organization $88,007.59 in back taxes for years 2012 and 2013.

Attorneys at Constitutional Law Center for Muslims in America, a nonprofit law center funded by MLFA, said that ICN was denied the religious exemption from property taxes specifically because of its adherence to its religious tenets.

“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, Senior Staff Attorney at CLCMA. “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.”

Jump said under the Free Exercise Clause of the First Amendment, the state cannot show favor or disfavor to any religion over another.

Attorneys at CLCMA filed the lawsuit on behalf of ICN on Monday, stating that the state officials violated provisions under the Religious Land Use and Institutionalized Persons Act (RLUIPA), the Religious Freedom Reformation Act (RFRA), and the Elementary and Secondary Education Act of 1965 as well as the Establishment Clause of the First Amendment. The lawsuit is seeking actual and punitive damages as well as a declaration that the assessed taxes were improper.

Khalil Meek, Executive Director of MLFA, said that this case has the potential to impact Islamic institutions all over America.

“If one state can pass or interpret laws that punish Muslims for following their faith, then other states can easily follow suit,” said Meek. “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.”

Meek said that anyone interested in supporting religious freedom should donate to MLFA to fund this and other cases impacting civil liberties in America.

The Constitutional Law Center for Muslims in America, Inc., is a nonprofit law center dedicated to defending the civil liberties and legal rights of Muslims in American courtrooms and litigating issues that are important to the Muslim community. CLCMA is funded by a generous grant from the Muslim Legal Fund of America.

Muslim Legal Fund of America is a national civil liberties legal fund that defends the U.S. Bill of Rights by supporting legal cases involving civil liberty encroachments. Established in 2001, MLFA has defended freedom of speech, freedom of religion, right to a fair trial, due process of law and many of our nation’s civil liberties. Learn more at

ICN-v-TN-2016-09-19 by MLFAORG on Scribd