AGO: No ad valorem taxes should be assessed on city airport hangars

Submitted by Suanne Z. Thamm
Reporter – News Analyst
August 1, 2019 – 3:00 p.m.

Fernandina Beach Municipal Airport

In a letter dated July 25, 2019, Florida Attorney General Ashley Moody notified Fernandina Beach City Attorney Tammi Bach via an Attorney General’s Opinion (AGO) that she sided with the City in its dispute with the Nassau County Property Appraiser and found no ad valorem taxes should be assessed on City-owned hangars leased to private individuals for aircraft storage.

This 5-page opinion resolves a long running dispute between the city and the Property Appraiser.

The city of Fernandina Beach owns and operates the municipal airport, where there are more than 50 T-hangars and bulk hangars to house aircraft.  The city rents or leases individual bays directly to private aircraft owners to engage in “non commercial activities, i.e. storage of aircraft.”  

The AGO differentiated between hangars owned by a municipality but used for profit-making purposes, such as food services, newspaper and tobacco sales and duty free shop, and those that were used for non commercial purposes.

The Opinion states:

“It appears from the authorities cited herein that leases of hangars at the Fernandina Beach Airport by nongovernmental entities are exempt from ad valorem taxation so long as the activity undertaken by lessees using the hangars constitutes a governmental, municipal or public purpose.  The Property Appraiser acknowledges that the hangars at issue are being used solely for noncommercial storage of private aircraft.  There has been no representation that the hangars are used for the conduct of any commercial, for-profit activity. …

“Accordingly, by leasing hangars to private aircraft the Fernandina Beach Airport is ensuring the provision of a basic airport purpose which ‘could properly be performed or served by an appropriate governmental unit’ under section 196.012(6), that does not involve commercial or for profit use by the nongovernmental lessees.  Therefore. it is my opinion the hangars are not subject to ad valorem taxation.”

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