A Florida appeals court has overturned a county circuit court decision requiring a resort investment firm to pay property taxes on 12 acres of leased land on Pensacola Beach.
Escambia County plans to appeal the ruling to the Florida Supreme Court.
The First District Court of Appeals ruled in Island Resorts Investments, Inc. vs Chris Jones, Property Appraiser etc. et al. that the resort developer is not the owner of the leased land and is therefore only subject to personal property taxes, not ad valorem tax.
The ruling is the latest development in years of litigation involving Santa Rosa Island, a barrier island deeded by the federal government to the county after World War II. Escambia County is restricted from selling the land.
According to the appellate court ruling, finite leases that are not perpetually renewed are not subject to property taxes. Previous rulings have stated that perpetually renewable leases are subject to ad valorem tax.
There are questions as to whether the state Supreme Court will agree to hear an appeal. Attorneys for Island Resorts contend the ruling in favor of their client does not conflict with the Supreme Court ruling in the Accardo case. The plaintiff's attorneys contend that case was based on perpetual leases on Navarre Beach, whereas the Pensacola Beach leases are non-perpetual.
However, attorney Benjamin K. Phipps, Senior Partner with Phipps & Howell, says the leases in Accardo were actually not perpetually renewing, an inconvenient fact overlooked by the Supreme Court.
"The oversight was necessary to make Accardo fit their earlier decision in the Navarre Beach case. There, some of the leases actually were perpetually renewable," Phipps said. "No doubt the lawyers in Island Resorts will strive to convince the justices of the distinction. The best efforts of the Accardo lawyers to focus the justices' attention on the actual facts were unavailing."
If the high court upholds the district court ruling, Escambia County will have to refund more than $450,000 in property taxes paid by Island Resorts. A ruling could also determine two other cases with the potential to set the county back $10.4 million.