Title: Taxation: Letter
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Permanent Link: http://ufdc.ufl.edu/WL00001959/00001
 Material Information
Title: Taxation: Letter
Physical Description: Book
Language: English
 Subjects
Spatial Coverage: North America -- United States of America -- Florida
 Notes
Abstract: Taxation: Letter, Sept 29, 1975, To: Harry Schooley From: Robert L. Shevin
General Note: Box 10, Folder 1 ( SF Taxation, ad valorem tax referendum-SWFWMD-1975 - 1975 ), Item 7
Funding: Digitized by the Legal Technology Institute in the Levin College of Law at the University of Florida.
 Record Information
Bibliographic ID: WL00001959
Volume ID: VID00001
Source Institution: Levin College of Law, University of Florida
Holding Location: Levin College of Law, University of Florida
Rights Management: All rights reserved by the source institution and holding location.

Full Text
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STATE OP FLORIDA
DEPARTMENT OF LEGAL AFFAIRS
COD OFFICE OF THE ATtORNEY GENERAL
THE CAPITOL
ROBERT L SHEVIN TALAMAm m PLOmIDA 31304
Attorney CGneral


September 29, 1975


075-255


Honorable Harry Schooley
Property Appraiser, Lee County
P.O. Box 1546
Fort Myers, Florida 33902

Re: TAXATION--Property transferred to exempt
governmental unit--Taxpayer--Vendor required
to place in escrow with tax collectors
current taxes prorated to date of transfer
based upon current assessment and millage
rates--Upon payment of current prorated taxes
remaining current taxes otherwise due to
stand cancelled. 5S196.28, 196.295, P.S.,
Chapter 75-103, 51 (196.255, F.S. 1975),
Laws of Florida. Chapter 74-234, 513,
Laws of Florida.

Dear Mr. Schooley:

You have requested my opinion on substantially the
following questions:

1) Did the Legislature by enacting Chapter 74-234,
Section 13, Laws of Florida, creating F.S.
196.295, intend to abolish the custom of pro-
ration of taxes upon closing?

2) If so, would the taxes be an obligation upon
the seller or upon the purchasing municipality?

3) If, in the alternative, F.S. 196.295, as
enacted by Chapter 74-234, Laws of Florida,
Section 13, permits the proration of taxes,
does it also permit the property appraiser









Mr. Harry Schooley
Page Two 075-255


to make the necessary adjustments in the tax
roll so as to relieve the:municipality of tax
liability for'.the property .purchased?

Florida Statute 196.295, as enacted by Chapter 74-234, Section
13, Laws of Florida, provides:

"Property transferred to exempt governmental
unit; tax payment into escrow.---In the event
title to property shall be acquired [between
January 1 and November 1 of any year] by a
governmental unit exempt under this chapter
by purchase, condemnation, or otherwise or
shall be acquired by purchase, condemnation,
or otherwise for use exclusively for federal,
state, county, or municipal purposes, the
taxpayer shall be required to place in escrow
with the tax collector of the county in
whigh the property is located an amount equal
to 120 percent of the previous year's tax
bill. This fund :shall be used to pay any
ad valorem taxes due, and the remainder shall
be returned."

This statutory provision, however, is,effective only until
October 1, 1975, in that the Legislature, by Chapter 75-103, Sl,
Laws of Florida, has substantially revised F.S. 19-6.295. Hence,
this opinion relates only to F.S. 196.295 as created by Chapter
74-234, Laws of Florida, and as effective through October 1, 1975.

The Legislature in enacting F.S. 196.295 certainly did not
abolish the "custoip of proration of taxes upon closing." Such
"custom" is nothing more than a private contractual agreement
between vendor and vendee by which they provide for the apportion-
ment of the taxes assessed against the realty "in any manner they
deem equitable." See BQyer, Florida Real Estate Transactions,
Volume 1, S4.82, p. 41. The fact that-the vendee is an exempt or
imnupe governmental entity in no way affects the-fact that pro-
ration of taxes is as much a matter of contractual negotiation
between the parties as is the purchase price of the property.
Consequently, your first question is answered in the negative.

The remaining two questions draw into issue the problem noted
in AGO 074-199, In such opinion, I concluded that, pursuant to
F.S. 192.042(1) and 192.053, non-exempt property is to be assessed
for ad valorem taxation as of January 1 of each year and a lien for
the taxes attaches as of that date. The fact that a municip lity
later on in the same year acquries and uses the property for
municipal or public purposes does not cancel the taxes for that
year for the period in which the municipality owned and so used the
property. However, pursuant to F.S. 196.28, the appropriate board
of county commissioners has the power and authority to cancel tax


II




II -


Mf. Harry Schooley 075-255
SPage Three



liens held by the county on lands acquired by a municipality and
used by it for municipal or public purposes. Until the board
exercises such power or, in the alternative, the taxes are paid
or the statute of limitations expires, the tax lien remains valid
but unenforceable during the continuity of the municipal owner-
ship with municipal or public purpose use thereof.

Florida Statute 196.295 simply provides a method of insuring
payment of the taxes in situations such as that treated in AGO
074-199. It compels the "taxpayer", i.e., the person or other legal
entity in whose name the property is assessed, on January 1 of the
year in question, F.S. 192.001(13), to place in escrow with the tax
collector an amount equal to 120 percent of the previous year's tax
bill. This will of course be the non-exempt or non-immune vendor
(seller).

The provisions of F.S. 196.295 are mandatory and clearly place
the duty on the vendor (seller) to effectuate the escrow of appro-
priate monies with the tax collector, though there is no bar to the
vendor obtaining all or part of such funds by virtue of proration
pursuant to contractual negotiation. Consequently, the tax roll
should reflect liability for payment of the taxes on behalf of the
vendor (seller) rather than the exempt or immune governmental
entity.

Effective October 1, 1975, F.S. 196.295, as substantially
revised by Chapter 75-103, Sl, Laws of Florida, will govern. Such
revision provides:

"In the event fee title to property shall
be acquired *[between January 1 and November
1 of any year] by a governmental unit exempt
under this chapter by any means except con-
demnation or shall be acquired by any means
except condemnation for use exclusively for
federal, state, county or municipal purposes,
the taxpayer shall be required to place in
escrow with the county tax collector an amount
equal to the current taxes prorated to the
date of transfer of title based upon the current
assessment and millage rates on the land involved.
This fund shall be used to pay any ad valorem
taxes due, and the remainder of taxes which would
otherwise have been due for that current year
shall stand cancelled."

Under such revised statute, the seller will be required to
place in escrow only that portion of current taxes for the year pro-
rated to the date of title transfer to the governmental unit based
upon the current assessment and millage rates on the affected prop-
erty. The remainder of the taxes otherwise attributable to the prop-


I









Mr. Harry Schooley .075-25
Page Four


erty for that portion of the year in which the exempt or immune
governmental -'etity owned and utilized the property for non-taxable
purposes, would be cancelled.- Consequently, subsequent to tL.-
effective date -of Chapter 75-103, Sl, there will be no necessity
for prorating the obligation for' taxes at the time of olosin'g since
only those taxes attrxiitabtle to the seller must be' escrowed.:- Such
taxes would, of course, be an obligation of the seller and the
property appraiser would he authorized to mako the necessary adjust-
ments in the twax roll so as to reflect -th cancellation of the
remainder of the taxes otherwise due and relieve Tthe municipality
of any record tax liability for the property purchased; ifr the tax:
year in which ,the transaction occurs, : .
-SU MMA R Y

Florida Statute 196.295, as created by Chapter
74-234,, S13, Laws of Florida, did not abolish'
the "castom" ofproration of, taxes upon closing.
It ;does mandatorily require that the vendfrt of
taxable, real property, being conveyed to' an
exempt or immune governmental entity for a non-
taxable use, place in escrow with the tax
collector, monies equal to 120 pericnta'f the
previous year's tax bill. Accordingly, the
tax roll should reflect liability for taxes on
the vendor's part for the year bf sale. Y

Effective October 1, 1975, the provisions- of-- -
S1, Chapter 75-103, Laws of Florida, which
substantially revised F.S. 196.295, will
govern Only those taxes attributable t0:the
seller, prorated to the date of title transfer,
must be escrowed. The taxes .attribtable to~
the remaining portion of the year during which
the exempt ~ or immune governmental entity owned
the property and utilized the same for a non-
taxable use are canoelled and the ta -roll:
should be -adjusted to reflect such- fact.

Sincerely,


ROBERT L. SHEVIN
ATTOR~UY GENERAL
RLS:pjs
Prepared by:



Harold F. X. Pu nell
Assistant Attorney General


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