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Disney Tax Status: Florida Won’t Dissolve Special Tax until Debt is Completely Paid off!

Disney Tax Status: The governor’s and local lawmakers’ fight with Florida’s largest private employer now hinges on whether the state can lawfully disband the special tax district that oversees Walt Disney World, as they did last week.

The squabble started after DeSantis signed a contentious bill last month prohibiting schools from teaching students in kindergarten through third grade about sexual orientation and gender identity.

Disney CEO Bob Chapek first tried to keep out of the contentious public debate over the bill, which has been dubbed the “Don’t mention Gay” law by critics. However, when internal pressure to oppose the measure grew, he eventually spoke out publicly against it at his company’s annual shareholders’ meeting in March.

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The Republican governor retaliated by attempting to paint Disney as “woke,” and by moving to revoke the unique status that permits the resort to operate as its own municipal government on the 39-square-mile area it controls, known as the Reedy Creek Improvement District.

Disney Tax Status

The corporation, in its first public remark since the state’s Republican governor and lawmakers targeted Disney, voiced confidence to investors this week that the state could not legally nullify its 55-year agreement as long as the Reedy Creek district’s bond obligation was not paid off.

As a result, the proposal to dissolve the special tax district in Orange and Osceola counties would violate an agreement made by Florida when the district was established in 1967, according to the corporation.

“In light of the state of Florida’s pledge to the district’s bondholders, Reedy Creek expects to explore its options while continuing its current operations, including levying and collecting its ad valorem tax bonds and utility revenue bonds, complying with its bond covenants, and operating and maintaining its properties,” Disney wrote on the Municipal Securities Rulemaking Board’s website on April 21.

According to Jacob Schumer of the Maitland, Florida law firm Shepard, Smith, Kohlmyer & Hand, Florida is contractually bound not to get involved with the district until the bond debt is paid off.

“It’s a monumental task to dissolve a special district and divide its responsibilities across two counties,” he said.

A request for comment from Disney was not returned. The resort, which comprises various theme parks, hotels, and its own bus fleet, employs roughly 80,000 people.

Disney Tax Status

The political squabble is likely to continue, as DeSantis has indicated that he is prepared to fight Disney.

“The governor’s administration is working to implement this legislation, which aims to level the playing field for Florida businesses. We’ll gladly offer you more information about our future plans as soon as we have it. Floridians would not be burdened by Disney’s debts, as the governor has often emphasized “In an email to CBS MoneyWatch, a representative said.

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While Disney (DIS) deals with the fallout from Florida Governor Ron DeSantis’ decision to revoke the company’s special tax district, some experts believe the breakup will be delayed.

“I don’t believe it’s very likely,” said Disney historian Richard Foglesong, author of “Married to the Mouse: Walt Disney World and Orlando.”

“To tell you the truth, the ramifications are just too terrible,” Foglesong added. “Already, there are discussions over the true cost of this and who will pay for it. According to our county officials, the expense will most likely be borne by the residents, and I don’t think that will be a popular proposal “He went on to say more.

Regardless, Governor DeSantis signed the bill into law on Friday, and it will take effect in June 2023, barring any substantial legislative backtracking. In an attempt to overturn the legislation, Disney might sue Florida for retaliation, though experts believe it is more probable that the media behemoth will engage in discussions to change the district’s terms.

‘The Pope with Mouse Ears’

Disney Tax Status

Walt Disney World Resort is currently located on a 40-square-mile parcel of land known as Reedy Creek, a special tax district that has allowed Disney to operate independently since its establishment.

That means Disney is in charge of all of its utilities and infrastructure, establishes building rules, runs its own police and fire departments, and has the freedom to expand and grow anytime it wants, all without the involvement of local or state governments.

“I call it the Vatican with mouse ears,” the historian explained, “because it’s basically the same kind of influence that the Vatican has in Rome in the state of Italy.”

As a result, the district saves the corporation tens of millions of dollars in taxes and fees each year, in addition to providing enormous autonomy and flexibility.

As a result of the recent verdict, Disney will be required to pay taxes on those government-funded services; however, it also means that Reedy Creek’s $997 million bond debt, as well as $163 million in annual tax payments, will be borne by Orlando residents.

“I believe that wiser minds will triumph once they consider the implications,” Foglesong predicted. “In under 72 hours, this bill was passed. We don’t know what the financial impact will be because the bill analysis done in the state legislature was just about a paragraph long for each of the three legislation that was discussed.”

A partnership for economic growth ‘The relationship between Disney and Orlando is an economic development marriage,’ according to Foglesong, who added that the state of Florida and the media and entertainment behemoth rarely had any issues prior to the passage of the Parental Rights in Education Act, dubbed the “Don’t Say Gay” bill by critics.

“Classroom instruction on sexual orientation or gender identity by school personnel or third parties may not occur in kindergarten through grade 3 or in a manner that is not age-appropriate or developmentally appropriate for students in accordance with state standards,” according to the controversial bill, which takes effect on July 1. Parents will be able to sue school districts if they are violated.

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Disney CEO Bob Chapek first chose to remain silent on the issue, preferring instead to work behind the scenes to modify the legislation. It was a complete failure.

Following widespread criticism, the executive eventually changed his mind. In addition to publicly denouncing the incident at the business’s annual shareholder meeting on March 9, he apologized to staff in a workplace memo.

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