Is there a best practice for where configuration files should be stored in a Java project. The file type is a Java properties file in this case, but I do use other file types in other projects.
Would the recommendation vary from stand alone application(.jar) to web app(.war)?
In general a common practice is to have a resources directory for configuration files which is copied into the build artifact by the build process. Maven uses this in its default project structure. Within the resources directory, you might also have a META-INF directory and/or a WEB-INF directory in an application packaged as a war.
You'll find that many open-source projects follow the directory structure used by Maven. In this setup your application source code is kept in src/main/java, application resources, including properties files, in src/main/resources, and other config files in src/main/config. Files related to unit tests use a similar directory structure; src/test/java and src/test/resources.
Personally I tend to use this layout because of its widespread use. I also keep an "etc" directory beneath the project root to house files that aren't directly related to the application. For example, I keep configuration files for PMD and Checkstyle in etc.