Pensacola Beach tax plan may not be legal

Originally Published by the Pensacola News Journal


Jamie Page • September 3, 2008


A bid by Escambia County to free Pensacola Beach commercial leaseholders from a "double taxation" bind is unconstitutional, according to a legal opinion by state Attorney General Bill McCollum.


Commissioners say they want to help commercial leaseholders who pay both property taxes and lease fees stay in business on the beach.

Leaseholders say taxes and lease fees unfairly cut into their profit margin.

Because commercial leaseholders pay significantly more than other non-beach businesses in Escambia that pay only property taxes, commissioners agreed to credit their lease fees for the amount of property taxes paid.

However, the commissioners' plan required approval from SRIA, which would have to amend the leases to allow it. The authority requested a ruling on the issue from the Attorney General's Office.

McCollum ruled against the plan.

"It is my opinion that the SRIA has no authority to offset lease fees from commercial leaseholders equal to ad valorem taxes collected against commercial leaseholders as such action would amount to an exemption from taxes where the exemption has no constitutional basis," McCollum said.

Commissiner Grover Robinson IV, whose district includes the beach, is "extremely disappointed" with the opinion.

"This was something we were absolutely committed to doing, so it is unfortunate," Robinson said. "I think it is going to create a real unfair issue of double taxation that's going to be a hindrance for beach businesses. I'm not sure where we go from here."

Fred Simmons Jr., who has five commercial leases on the beach, wants the county to do away with lease fees, which would mean dissolving the SRIA.

"How would any commercial business in town feel about paying 2 to 5 percent of their gross income in lease fees like we do on the beach," Simmons said. "I don't know how we are going to survive out here paying both."

Simmons paid $70,000 in property taxes and $87,000 in lease fees last year, he said.

Commercial leaseholders represent 20 percent of the leases on Pensacola Beach, yet pay 50 percent of the lease fees, Robinson said.

June Guerra pays taxes and lease fees on her Capt'n Fun building and the building that houses Charlie Banana's and Portofino Charlie's.

"It is really sad that it is so hard to be successful on this beach," Guerra said. "It's been a real struggle out here since the hurricanes. You wonder if they don't want businesses to be successful the way they tax us. It's difficult to be positive about a government that is insensitive. It just kills your spirit."

SRIA executive director Buck Lee said the SRIA board will discuss the issue at its Sept. 10 meeting.