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Florida voters approved major property tax reform in January that mainly benefits homesteaders. Businesses, which pay the highest taxes of all property owners in the state, and non-resident homeowners were disappointed that they didn’t get more tax relief.

Now a federal lawsuit is challenging the disparity in the taxes paid by snowbirds and residents who live in their homes full time.
 

Violation of Taxpayer Civil Rights?

Under Florida’s Save Our Homes Amendment, homesteaders enjoy a 3% property tax cap. A 10% cap will go into effect next year for businesses and non-resident homeowners following the passage of Amendment 1.

Kenneth Kania, who maintains a second home in St. Petersburg, filed a lawsuit claiming the unequal treatment of residential property is a violation of his civil rights. Kania says there are 600,000 snowbirds in Florida paying higher property taxes than the homeowners who live there year round. The suit names Pinellas County’s property appraiser and tax collector along with the heads of the county commission and school board.

County attorneys filed a motion to dismiss claiming federal courts cannot rule on state tax issues. Kania contends it is a civil rights issue that must be heard in federal court.

Tax Cap is Not Automatic

While the lawsuit plays out in court, businesses and other non-homesteaders should understand that to receive the new 10% tax cap next year, they must file a return by March 1, 2009.

This filing requirement will be challenged in the legislature this spring because it was not originally part of Amendment 1 and was added to the enacting bill by Senate finance and tax staffers unbeknownst to sponsoring legislators.