In Christian Congregation of Jehovah's Witnesses v. Township of Gloucester, (D NJ, April 1, 2026), a New Jersey federal district court, invoking the federal Tax Injunction Act as well as principles of comity, dismissed a suit by a Jehovah's Witnesses organization ("CCJW") challenging a Payment in Lieu of Taxes Agreement ("PILOT") that its predecessor made with the Township. The Agreement provides that the religious organization will make these payments so long as its Assembly Hall remains exempt from property taxes. Since 1993, CCJW and its predecessor have paid over $1.3 million. Annual payments have been raised over the years, and CCJW has stopped making payments under it after the Township refused to modify the agreement. The court said in part:
CCJW asks the Court to declare that the Township’s enforcement of the PILOT Agreement violates its state and federal constitutional rights and that the Agreement is void.... On its state law contract claims, it seeks an order voiding the Agreement and terminating its obligation to continue making payments under the Agreement...... In the alternative, it seeks reformation of the Agreement to conform to the parties’ expectations. .... CCJW also seeks restitution of amounts previously paid under the Agreement....
Nomenclature aside, CCJW is plainly seeking declaratory relief to determine its alleged tax-exempt status under state law and prevent the Township from potentially taking action to challenge that status and assess, levy, or collect property taxes. That is precisely the type of relief the TIA precludes....
Finally, to the extent CCJW seeks only to “void” the PILOT Agreement and does not seek declaratory relief regarding the Township’s future tax collection efforts, the comity doctrine would still counsel against exercising jurisdiction....
In sum, where, as here, resolving Plaintiff’s claims would require the Court to address issues so closely tied to the administration of state tax law, the comity doctrine counsels restraint when the courts of New Jersey are fully capable of adjudicating these state-law issues alongside Plaintiff’s federal constitutional claims.
