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Facing public ire after the Florida legislature passed a bill forgiving $3.5 million in back taxes, Pensacola Christian College (PCC) has paid the money it technically no longer owed.

In January, the IRS ruled that the college's publishing arm was liable for taxes as a profit-making entity. A Beka Books, the country's largest publisher of Christian textbooks, is responsible for about 60 percent of the college's income.

Billed for back taxes, the college paid the initial federal tab, estimated at $44.5 million, but sought a waiver on Florida's corporate tax. When the tax-break legislation went into effect, Gov. Lawton Chiles received hundreds of letters contending the school was receiving a state subsidy.

In an advertisement in the Pensacola News Journal, PCC president and founder Arlin Horton said the school has borrowed money to pay back the taxes to "remove any question as to our Christian responsibility in the matter of back taxes."

Joel Mullenix, PCC's vice president for public affairs, says the money was paid "because it appeared some people were going to be offended, and we do not want to be an offense."

The 22-year-old college halted several construction projects as a result of the unexpected bills, Mullenix says.

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Last Updated: October 10, 1996

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October 28 1996, Vol. 40, No. 12