Article Courtesy of the Pensacola News Journal
By Melissa Nelson Gabriel
Published August 20, 2018
Hundreds of Pensacola Beach leaseholders could see tax refunds soon after
Escambia County commissioners approved the release of funds from a $9.8
million escrow account.
Commissioners voted Thursday night to allow the tax
collector's office to begin releasing money from the account, which contains
tax payments made while the leaseholders were suing the county over whether
it could collect property taxes on land that is leased and not owned.
"The court has ordered (the county) to refund taxes that were illegally
collected so this is exactly what should be happening," Ed Fleming, an
attorney for hundreds of Pensacola Beach
condominium owners, said Friday.
The Escambia County School District has another $6 million in a reserve
account created to hold the disputed taxes. Superintendent Malcolm Thomas
said the tax collector's office has ordered the district to begin releasing
some of those funds.
"We have received our first invoice of about $170,000,"
"We have held the money aside knowing that someday we might have to pay it
back," said Thomas, who added that he doesn't expect the full $6 million to
An outgoing parasail boat and
an incoming waverunner pass off Pensacola Beach on Tuesday, August
"If and when this all settled, we will use what is left to support our
schools," he said.
In a series of recent rulings, courts have said the county cannot collect
taxes on the land underneath condominium buildings but can tax improvements
to the land.
Chris Jones, Escambia County property appraiser, said his office is
reviewing the tax payments to determine which leaseholders are due refunds.
The county tax collector's office will then issue the refunds, he said.
The courts have issued rulings in a lawsuits brought by Portofino Island
Resorts and The Beach Club condominium complexes. More than 30 other
condominium homeowners associations have filed separate lawsuits. Jones and
attorneys for the associations are in the middle of settlement negotiations,
which will determine the amount of the refunds the condominium owners will
receive and what their tax bills will be going forward.
Jones said his office has reached agreements with five condominium
associations, is in negotiations with 11 more and is waiting to begin
negotiations with five others.
Pensacola Beach is unique because it was deeded to Escambia County, along
with much of the rest of Santa Rosa Island, in 1947. The deed agreement
prohibited the county from selling the beach land and stated that the land
must be used in a way that benefits the public.
The county decided in the 1950s to develop the beach to bring in tourism
revenue and set up as system of 99-year leases to encourage commercial and
residential development on the island.
The county advertised "tax-free" beach land in
After Pensacola Beach was heavily developed in the 1980s, the county turned
to the beach as a source of property tax revenue. The move promoted the
series of lawsuits that continue today.
Complicating the issue is that the language in the leases has changed over
the decades. Some leases are open for renegotiation after 99 years and other
are perpetually renewable. The courts have ruled that the perpetually
renewable leases are tantamount to outright ownership and can be taxed,
while the renegotiable leases are not.