TRIM Notices [Lowndes Legal Talk]

Tune in to Lowndes Legal Talk featuring attorneys Brendan Lynch and Brian Smith discussing TRIM notices and property valuation, including the possible effects of COVID-19 on property values.

Lowndes Legal Talk is a video and podcast series designed to provide you with perspectives on the legal and business issues affecting you.

View additional videos here.

Appellate Court Reconsiders Decision in Disney Property Tax Appeal

By: Brendan Lynch & Jennifer R. Dixon

On Friday, the Fifth District Court of Appeal issued a revised opinion in a closely-followed case, Singh vs. Walt Disney Parks and Resorts, a property tax appeal involving the 2015 assessment of Disney’s Yacht & Beach Club property. In its prior opinion, issued in June, the three-judge panel held that the valuation method employed by the Orange County Property Appraiser, a highly-scrutinized method known as “Rushmore,” was illegal in Florida because it failed to exclude the value of nontaxable, intangible business value from the appraisal. The sweeping conclusion by the appellate court—that Rushmore was patently illegal in Florida—promised to be a death knell to the appraisal method in the state, as previously reported.

Upon rehearing, the appellate court rolled back its categorical rejection of Rushmore—instead ruling that the application of Rushmore was illegal as applied in the Disney case. By limiting its analysis to the Disney case, the revised decision better aligns with the record on appeal and the relief the parties actually sought. Although amicus curiae appearing in favor of Disney had suggested that Rushmore be rejected globally, neither of the parties to the appeal requested such relief.

The revised decision does not signal that Rushmore will be widely adopted statewide. Remaining in the opinion is legal analysis that discusses the infirmities in the Rushmore method, and how it may not pass constitutional muster. Appraisers who continue to employ Rushmore to value hotel and resort properties in the state are certain to face challenges and litigation based upon this analysis.

Furthermore, the revised decision did not alter the court’s initial analysis related to ancillary income at resort-style hotels, which was the other significant result. The Orange County Property Appraiser is required to determine ancillary income (non-room income) by evaluating what the space would be rented for to a third-party, not based on how much revenue that particular space (restaurant; spa; banquet; etc.) brought in throughout a given year.

The revised appellate court decision can be found here.

Lowndes attorneys Jennifer Dixon and Brendan Lynch authored an amicus brief that was submitted in the case on behalf of the Central Florida Hotel and Lodging Association. If you have any questions about this case, or questions about your property taxes in Florida, please reach out to one of authors or to the members of our Property Tax Group.

President Trump Signs Executive Order Deferring Certain Payroll Tax Obligations Through December 2020

By: Amanda Wilson & Ferran Arimon

On Saturday, August 8, President Trump enacted four executive orders after Democrats and the White House were unable to reach an agreement on a new stimulus bill last week. Among the four executive orders, the President included a payroll tax deferral. The relevant order states as follows:

To that end, today I am directing the Secretary of the Treasury to use his authority to defer certain payroll tax obligations with respect to the American workers most in need. This modest, targeted action will put money directly in the pockets of American workers and generate additional incentives for work and employment, right when the money is needed most.

The order calls for deferral of the employee portion of payroll taxes, 6.2% for Social Security and 1.45% for Medicare, for workers making less than $100,000 a year through the rest of 2020. Any amount deferred pursuant to the implementation of this order may be deferred without any penalties, interest, additional amount or addition to the tax.

However, as it stands, employees will still owe the deferred taxes at the end of the year since President Trump cannot eliminate the tax liability without legislation. In an effort to address the concerns regarding payment at the end of the year, the following language was also included in the White House’s Memorandum on Deferring Payroll Tax Obligations:

The Secretary of the Treasury shall explore avenues, including legislation, to eliminate the obligation to pay the taxes deferred pursuant to the implementation of this memorandum.

President Trump has stated that if reelected he plans to forgive these deferred taxes and make permanent cuts to payroll taxes. Again, though, this requires legislative action. If the President is not reelected, workers will presumably be required to pay these taxes at the end of the year.

The other three actions signed on Saturday include as much as $400 in enhanced unemployment benefits, an executive order on assistance to renters and homeowners and a memorandum further deferring student loan payments through December 31, 2020.


Enjoy this blog? Subscribe for the latest updates!