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Government-owned land leased to private parties may be assessed for ad valorem taxes.

According to the Court of Appeal of Florida, First District, government-owned land leased to private parties may be assessed for ad valorem taxes. However, the assessment must take place during the current tax year, rather than retroactively.

During the 1940s, the federal government conveyed real property located on Santa Rosa Island in Florida to Escambia County, Florida (County). The conveyance was conditioned on the County retaining the property, not disposing of it. The County was, however, allowed to lease the land, in whole or in part, at its discretion. On July 1, 1997, a portion of the property was leased by the Santa Rosa Island Authority, an agency of the County, to Gary Work as trustee of the Pensacola Beach Land Trust. The property was eventually subleased and improved with the Portofino Condominiums, a development that included 765 units in 5 towers.

For many years, the county assessor treated both the land and the improvements as exempt from ad valorem taxation because the land was government owned. In 2004, the district court, in a separate matter, provided authority for the county appraiser to assess ad valorem taxes on improvements on Santa Rosa Island under an equitable ownership theory. Under this theory, the County assessed ad valorem taxes against the Portofino Condominiums and their improvements. The Portofino Tower One Homeowners Association (Homeowners Association) challenged the assessments by disputing the amount and whether the County had the right to assess ad valorem taxes on improvements located on government-owned property.

At trial, the court first determined that the County was legally authorized to assess ad valorem taxes on the improvements; but, the County was not legally authorized to assess ad valorem taxes on the land underlying the Portofino Condominiums. Then, the trial court found that the county appraiser's assessments exceeded the just value of the property. Pursuant to state statute, the trial court concluded that the record provided competent and substantial evidence to allow the court to establish the assessments, which the trial court did itself. The County appealed the trial court's determination that the Portofino land was not subject to ad valorem taxation and the trial court's assessment.

The district court of appeal first evaluated whether the Portofino land could be subject to ad valorem taxation. Importantly, the court noted that ad valorem taxes can be assessed on government-owned land. However, in this instance, the court found the land underlying the Portofino Condominiums was not subject to ad valorem taxation because the county appraiser did not seek to assess ad valorem taxes on the land during the years in question. As such, the County could not assess ad valorem taxes on the land "after the tax roles (sic) are certified" The appellate court affirmed the trial court's decision that the County could not assess ad valorem taxes on the Portofino Condominiums as the tax years had already been completed.

Jones v. Portofino Tower One

Homeowners Ass'n.

District Court of Appeal of Florida,

First District

January 13, 2012

77 So. 3d 242

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Title Annotation:Recent Court Decisions
Publication:Appraisal Journal
Geographic Code:1USA
Date:Jun 22, 2012
Words:499
Previous Article:Charles F. Seymour, MAI.
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