Article Courtesy of The North West Florida Daily News

By Kari C. Barlow

Published March 24, 2014

The Florida Supreme Court has upheld a lower court’s ruling that Navarre Beach leaseholders must pay taxes on their houses, condos and businesses despite sitting on county-owned land.

Santa Rosa County Property Appraiser Greg Brown, who has pushed for the taxation since 2001, praised the decision.

“To me, it was a fairness issue,” he said. “They had all the rights. They could sell the property. They could take the profits from the sale. They could rent it, they could lease it. … They could do everything you can do on the mainland. They just didn’t have to pay taxes on it.”

(READ THE RULING)

Pensacola attorney Danny Kepner, who represented the leaseholders who challenged the taxation, had a different take. He said the push by Brown to collect property taxes never should have happened. “The property appraiser started by, in my humble opinion, ignoring what the (state) statute said,” Kepner said. He said the statute clearly states that the Santa Rosa Island property is owned by the county. Under the ruling, the leaseholders will have to pay property taxes as well as their annual lease fees.

But legislation sponsored by Congressman Jeff Miller could give Escambia County two years to transfer Navarre Beach to Santa Rosa County. It also will allow Navarre Beach leaseholders to obtain the titles to their properties.

“It would put them in line with the rest of Santa Rosa County,” said Dan McFaul, Miller’s chief of staff.

McFaul said the bill has passed the full House and now awaits action in the Senate.

Historically, Navarre Beach residents have not paid property taxes because they lease land from the county instead of owning outright.

The federal government gave Santa Rosa Island to Escambia County in the late 1940s. Escambia then leased Navarre Beach to Santa Rosa, which in turn leases beach property to individuals for 99 years with an option for another 99 years.

Leaseholders originally were told they would pay only an annual lease payment — not taxes on the land and any improvements. But local officials began to levy taxes, which triggering lawsuits.

In 2011, Florida’s First District Court of Appeal ruled that property taxes could be levied on leaseholders because they essentially were homeowners.

Brown said the taxation of properties on Navarre Beach has generated about $81 million for the county since 2001.

While many of the leaseholders have been paying taxes for several years, a number of those opposed to taxation haven’t.

Brown said about $7 million remains unpaid, along with just over $3 million in interest.

Brown said he and Tax Collector Stan Colie Nichols will meet with county attorneys to determine how soon the back taxes should have to be paid.