Double Your Taxes, Double Your Pain

Bill Post, author of Deceit Beach, has a Viewpoint article in the current issue of the Independent News that underscores the damage done when a court issues a one-word opinion that fails to articulate any facts or law.

The subject is ad valorem taxation of Pensacola Beach businesses. The point is that when the First District Court of Appeals upheld a trial court ruling without any analysis -- just the word "affirmed" -- it effectively sentenced beach businesses to ruinous double taxation on an erroneous understanding of the facts.

Incidentally, the same thing might be said of the identical eight appellate court rulings, each of them just one word long, issued more recently in the Portofino condominium cases.

In the commercial lease fee case, lower court judge Nickolas Geeker had reasoned almost a year ago, "Without the collection of real property ad valorem taxes from plaintiffs and other beach residents, plaintiffs would pay nothing to the general fund of Escambia County and would derive a tax benefit not generally conferred to other residents of Escambia County."

That ruling, Post points out, flatly ignores the unusually high "lease fee" beach businesses pay and the explicit reason for that high fee, as stated in the foundational statute that created the Santa Rosa Island Authority. Writes Mr. Post:

Pensacola Beach commercial leaseholders of county owned structures pay an extraordinarily large percentage of their gross income toward the lease fee because they "have their taxes included in the annual rentals of the property." And now they pay ad valorem taxes on top of the lease fee, which is not and never was a simple lease fee or simple annual rental.

The history Bill Post presents is unarguable. When commercial lease fees first were imposed back in the early 1950's, the Santa Rosa Island Authority was directed to calculate each lease fee according to a percentage of gross income earned by each business. The explicit purpose was "to compensate for taxes." Tellingly, in that statute all "surplus" revenues were to be paid into the county's general fund -- exactly what Judge Geeker was misled into assuming would not happen unless the county's new beach real estate taxes were imposed.

As Post concludes, if in fact there has been a "failure to fill the county's coffers" it "is not a failure of the leaseholder as implied by Judge Geeker, but a failure of the SRIA and the county" to make sure fees in excess of equivalent real estate taxes are paid to the general fund.