Residents of Pensacola Beach must pay property taxes like everyone else, the 1st District Court of Appeal affirmed Monday in a case that addresses an issue that has persisted on Santa Rosa Island since shortly after World War II.
In an opinion affirming a lower court ruling and setting the stage for possible Florida Supreme Court review, the 1st DCA ruled that Escambia County can collect property taxes from residents even though the residents dont own the land on which their residences sit. All of the homes on the island are built on land that is leased by Escambia County to the homeowners.
Were satisfied with the outcome, said Escambia County Property Appraiser Chris Jones of Mondays ruling. It vindicates what we have been saying for some time.
Mondays ruling affects about 2,400 properties that have been assessed $39 million in property taxes since the case was brought forward in 2004, said Escambia County Tax Collector Janet Holley. Of that, residents have paid $26 million in anticipation that the ruling might go Escambias way.
The case is only the most recent to challenge the countys taxing authority. Since 2004 there have been lawsuits challenging about $90 million in property assessments.
Mondays ruling is the latest in what 1st DCA Judge Van Nortwick called a long and rather tortured history of tax battles on the island over how local governments should tax residents who lease the property on which their homes are built.
Santa Rosa Island is home to Pensacola Beach in Escambia County and Navarre, which is governed by Santa Rosa County. What was once a rather desolate and isolated stretch of sugar-sand beach owned by the federal government was donated to Escambia County in 1947 with the restriction that it could not sell parcels. Escambia officials, in turn, leased the eastern portion of the island to Santa Rosa County.
Both counties entered into long-term lease arrangements with leaseholders who were allowed to build, take out mortgages, sublet and transfer title to residences built on parcels that were protected by 99-year lease agreements. Originally, leaseholders did not pay local property taxes but were assessed intangible taxes.
Over the years as parcels began filling up with permanent residents, Santa Rosa and Escambia officials began looking at ways to shift to property tax collections. Numerous lawsuits followed. Santa Rosa County now levies property taxes on the land and the improvements. That levy, upheld by the 1st DCA in April, is also likely to be challenged in the states highest court.
In Mondays ruling, the appeal court sided with Escambia County officials who, unlike those in Santa Rosa, are only trying to tax the improvements and not the land upon which they stand.
There is nothing inherently unlawful in subjecting the appellants to ad valorem taxes, as leaseholders on Santa Rosa Island were subject to, Nortwick wrote. ...Looking at the benefits and burdens of ownership, these Escambia County leaseholders are no different than the Santa Rosa County leaseholders.
Talbot Sandy DAlemberte, a Tallahassee attorney representing property owners in both Santa Rosa and Escambia counties, says the ruling leaves the island with three distinct taxing structures, a discrepancy that could lead to the high court taking an interest in answering the question once and for all.
Right now its a mess, DAlemberte told the News Service Monday.
