Article Courtesy of The Pensacola News-Journal
By Melissa Nelson Gabriel
Published November 4, 2016
Hundreds of Pensacola Beach condominium owners plan to
file tax lawsuits against the county before the end of November.
In the lawsuits, the condominium owners will challenge a decision by
Escambia County Property Appraiser Chris Jones not to apply a recent court
ruling involving taxes on leased beach land to condominiums.
"The real question is
why are condominium associations being treated differently
than other taxpayers on the beach," said Ed Fleming, an
attorney representing at least 15 beach condominium
associations.
Fleming said the associations are waiting on 2016 property
tax bills to file the lawsuits. County officials have said
the bills should be mailed in the coming days.
The Florida Supreme Court in late July refused to hear the
county's appeal of a tax suit filed by the developer of the
Portofino resort condominium towers. In its decision not to
hear the case, the high court upheld a lower court ruling
prohibiting the county from collecting property taxes on 12
acres of undeveloped leased land where two new Portofino
towers are scheduled to be built.
At issue in the various tax disputes is
millions of dollars a year in county tax revenues from the
beach. |
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Pensacola Beach was deeded to Escambia County by the federal government in
the aftermath of World War II. Under the deed agreement, the county was
prohibited from selling beach land outright. To promote residential and
commercial development on the barrier island, the county developed a system
of 99-year lease agreements. Under the agreements, leaseholders pay an
annual lease fee to the Santa Rosa Island Authority in exchange for use of
the leased land.
In a series of lawsuits dating back decades, beach residents have challenged
the legality of the county assessing property taxes on land that is leased
and not owned. The county began assessing property taxes on the beach in the
1980s after the area became heavily developed.
Following the Supreme Court's decision earlier this year not to hear the
Portofino land case, Jones and his staff reviewed the lease agreements for
thousands of beach properties. Whether or not a leaseholder was assessed
2016 property taxes on leased beach land depended on the wording of the
original lease with the county. Various Santa Rosa Island Authority
attorneys have worded leases differently through the decades. Some of the
leases are automatically renewable and others are subject to review after
the 99-year duration.
The county waived property tax on leases that are subject to review but
assessed taxes on leases that are automatically renewable. The decision
followed the court's determination that finite leases should not be subject
to taxes. Because of the court ruling and the subsequent review of beach
leases, the county did not assess property taxes this year on about half of
the commercial and residential land leased on the beach.
But Jones said the review did not look at land where condominiums have been
built.
"Condominiums represent a whole separate bucket of issues," he said.
Jones said the county will wait to act on the condominium tax issues until a
court rules on a separate lawsuit filed by the Beach Club condominium
homeowners association. That suit, pending before an appeals court, states
that the condominium owners should not be assessed property taxes on the
land on which their condominium tower was built because the 99-year lease
agreement for the land is not automatically renewable.
Fleming said the condominium associations he represents plan to file
lawsuits as soon as the 2016 property tax bills are received in the hope
that the individual condominium owners will eventually receive refunds for
the 2016 taxes. Fleming has encouraged the condominium owners to include a
note in their 2016 tax payment stating that the taxes were paid in protest.
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