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FL Condo Taxes: No Taxes On Land Leased From County

A group of Taxpayers has triumphed over Escambia County regarding tax on the land underlying their condo building. The condominium residents of the Beach Club Towers in Escambia County, Florida, recently received notice that the Florida Supreme Court will not review the appeal filed by the Property Appraiser, after the Taxpayer’s won at the District Court of Appeal.

The Beach Club Towers, and several other properties in Escambia County, are located on land that is leased from the county. Land owned by the government is typically not subject to ad valorem tax, per Section 196.199, Florida Statutes (“F.S.”). However, in 2011, Escambia County began treating all land and improvements to land for condominiums as subject to ad valorem taxes. The Property Appraiser began taxing the land as a result of a Florida Supreme Court case, Arcardo v. Brown, 139 So. 3d 848 (Fla. 2014). The court there held that in instances of a perpetually-renewable lease, the lessee has an “equitable” ownership in the land, which makes the ownership subject to ad valorem taxes. By comparison, the owners of the Beach Club Towers have a 99-year lease with the county. This type of lease is sufficient for the residents to claim homestead on the land, per Section 196.031, F.S., which allows homestead rights to lessees of land with leases 98 years. This does not, however, convey any ownership rights to the land.

The homeowner’s association fought back. Beach Club Towers Homeowners Association took the Escambia County Property Appraiser to court. The association stated the land was leased and the condominium owners did not have an ownership interest in the land, and thus did not owe ad valorem taxes. The Property Appraiser fired back and won at the trial court level.

The condominium association appealed the trial court’s decision. In a 2-1 decision, the First District Court of Appeals agreed with the Taxpayers. The Property Appraiser attempted to appeal to the Florida Supreme Court, but the Florida Supreme Court refused to hear the case. The ruling of the First District Court of Appeals stands.

The moral of the story is simple – just because a taxing authority says something is taxable does not mean, in fact, the property is subject to tax.

About the authors:

FL PROPERTY TAX ATTORNEY; FLORIDA SALES TAX ATTORNEY; FLORIDA SALES TAX AUDIT

Amanda Levine is an associate attorney who joined The Law Offices of Moffa, Sutton, & Donnini, P.A. in 2013. Ms. Levine joined the firm as a clerk during law school. Ms. Levine received a bachelor's degree in Accounting from University of Central Florida. She spent several years working in public accounting before attending Nova Southeastern University Law School. She was admitted to the Florida Bar in 2014. During her time at Nova Law, Ms. Levine was the Executive Justice of Academics for the Moot Court Honor Society, as well as the Finance Chair. She was awarded by the National Order of the Barrister, a national honor society which acknowledges excellence in oral advocacy and brief writing skills. You can read more on Amanda in her bio HERE.

FL SALES TAX ATTORNEY; FLORIDA SALES TAX AUDIT; TALLAHASSEE SALES TAX ATTORNEY

David Brennan is an associate attorney with Moffa, Sutton, & Donnini, P.A. His primary practice area is multistate tax controversy. David received a B.S. in Accounting and Finance, with a minor in Computer Science, from Florida State University. He worked as an accountant for a CPA firm before attending law school at Regent University. He received his Juris Doctor in 2013 and was licensed to practice law in Florida in the same year. In 2015, David earned his Masters of Laws in Taxation from Boston University. David worked for the Florida Department of Revenue as a Senior Attorney before entering private practice. You can read his BIO HERE.

At the Law Office of Moffa, Sutton, & Donnini, PA, our primary practice area is Florida taxes, with a very heavy emphasis in Florida sales and use tax. We have defended clients against Florida sales and use taxes for more than 25 years with over 100 years of cumulative experience working for our firm. Our partners are both CPAs/Accountants and Attorneys, so we understand both the accounting side of the situation as well as the legal side. We represent taxpayers and business owners from the entire State of Florida. Call our offices today for a FREE INITIAL CONSULTATION to confidentially discuss how we can help put this nightmare behind you.

AUTHORITY

BEACH CLUB TOWERS HOMEOWNERS ASSOCIATION, INC. v ESCAMBIA COUNTY PROPERTY APPRAISOR, 231 So.3d 566, (Oct. 11, 2017, Fla. 1ST DCA).

ADDITIONAL RESOURCES

FLORIDA HOMESTEAD EXEMPTION: A FAMILY (UNIT) AFFAIR, published August 27, 2017, by James McAuley, Esq.

FL HOMESTEAD EXEMPTION RISKED RENTING ON AIRBNB, published March 31, 2017, by Amanda Levine, Esq.

EVEN WALT DISNEY WANTS TO PAY LESS PROPERTY TAX, published October 31, 2016, by Amanda Levine, Esq.

TOURISTS & TAXES: THE EFFECTS OF RENTAL ON HOMESTEAD PROPERTY, published September 29, 2016, by Amanda Levine, Esq.

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