NASHVILLE, Tenn. — The Islamic Center of Nashville is suing the state in federal court after it says it was denied a tax exemption.

The lawsuit, filed Monday, argues the center’s religious tax exemption for its Nashville International Academy school was denied because of a banking deal that allowed the center to follow its religious beliefs, reported the Tennessean ( The center was billed more than $87,000 in past-due taxes as a result.

In 2008, the mosque built a new school building. Since the Islamic center adheres to Islam’s prohibition against paying interest, it struck a banking agreement known as an ijara to pay for the construction without interest, according to the lawsuit.

The arrangement transferred the property’s title to a bank until October 2013 when the Islamic center paid its final payment. It was the transfer, the lawsuit said, that led to the denial of the Islamic center’s retroactive exemption request.

“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,” said Christina Jump, an attorney representing the mosque.

The lawsuit requests damages and asks a judge to say the center does not have to pay the taxes.

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 exemption. It also sympathized with the mosque and suggested they take legislative action.

A state spokesman said he couldn’t comment on pending litigation.