Florida Record

Sunday, September 22, 2019

Pensacola Beach developer's attorney makes case against tax assessment

By Carrie Salls | Jun 21, 2016

PENSACOLA BEACH – An attorney representing a company developing resort towers in Pensacola Beach believes a request by the Escambia County property appraiser and tax collector asking the Florida Supreme Court to reverse a ruling prohibiting the county from collecting taxes on the land will be denied. 

Edward P. Fleming, a founding member and partner of McDonald, Fleming, Moorhead Attorneys at Law and an attorney representing Island Resorts Investments Inc. in Island Resorts v. Jones, said the county officials asked the state’s high court to reverse the ruling because it conflicts with a previous case addressing the issue of taxation on land, Accardo v. Brown.

“We believe that (the) request, to be briefed during the next 30 days, will be denied, as Accardo was limited to perpetual leases,” Fleming told the Florida Record.

Under a Santa Rosa Island deed agreement, Escambia County cannot sell land on the island outright.

Fleming said the law currently states that land leased from the government of Pensacola Beach should be taxed only as intangible personal property, but a key question is whether the “lease” at issue is truly a lease. Fleming said the Florida Supreme Court has ruled that a lease that never ends, also known as a lease in perpetuity, is not a lease.

“The analysis that must be done is to determine whether the lease at issue is, or is not, a ‘true’ lease,” Fleming said.

Fleming said Escambia County Property Appraiser Chris Jones has stated that he does not intend to apply the Island Resorts v. Jones decision to condominiums, constituting more than half of the residential properties at Pensacola Beach.

“His attempt to distinguish condos is not supported by law, and runs contrary to existing law, but it is apparent that this (is) a battle that will have to be fought,” Fleming said.

In an amended appellant brief filed in September 2015 with the 1st District Court of Appeal, Fleming and attorney R. Todd Harris of McDonald, Fleming, Moorhead wrote “the property appraiser has misinterpreted and misapplied a Florida Statute he does not like to reach an unlawful result – i.e., a failure to follow the mandatory language of the controlling statute requiring that the leasehold interest now before this court be taxed for what it is, intangible personal property.”

In March, the district court of appeal overturned a ruling from the Circuit Court for Escambia County that would have allowed Pensacola Beach leaseholders to be assessed ad valorem property taxes. In May, an appeals court denied the county’s motion for rehearing the case.

Fleming said the property at Pensacola Beach was not taxed before 2004, and the revenue from lease fees was adequate to sustain beach government and beach services. Beach residents were assessed special taxes for fire protection, mosquito control and some other services. Starting in 2004, beach residents were taxed on value of improvements only, and, beginning in 2011, they were taxed for improvements and land.

“The Island Resorts v. Jones case only deals with taxation of land, and that case held that the land belongs to Escambia County – not the leaseholders,” Fleming said. “Land that belongs to the county is not subject to ad valorem taxation, but the leasehold interests in land is taxable as intangible personal property by statute.” 

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