How does the new Florida law affect Disney’s tax status? :: WRAL.com
Florida Governor Ron DeSantis has signed a bill to repeal a decades-old agreement that allowed the Walt Disney Company to operate as an independent government around its 25,000-acre theme park resort.
The April 22 ruling came after Disney, the state’s largest employer, expressed opposition to legislation ban classroom instruction on sexual orientation and gender identity from kindergarten through third grade, which could also affect students in older grades.
It’s unclear whether Florida’s actions could have financial implications for Disney that extend beyond its Orlando-area theme parks. Still, social media users were quick to jump to conclusions.
“DeSantis erases Disney’s tax exemption law. It will cost Disney $200 million in taxes. Per year,” read a caption from april 21 next to a photoshopped image of DeSantis standing in front of a trash can with the heads of Mickey and Minnie Mouse sticking out.
The post was flagged as part of Facebook’s efforts to combat fake news and misinformation on its News Feed. (Learn more about our partnership with facebook.)
The grammatically problematic statement supported numerous inaccuracies about the impact of the new law, and it misinterpreted the privileges the tax district originally granted Disney.
Disney did not respond to PolitiFact’s request for comment.
Disney already pays taxes in Florida
Reedy’s Creeka special tax district for the Walt Disney World Resort that operated under the authority of a county government, was created in 1967 to lure the entertainment giant to Orlando.
Under the agreement, Disney was responsible for the construction and maintenance of municipal services such as power, roads and fire protection, which ensured that residents of Orange and Osceola would not have to pay for these services.
Disney’s most important benefit from the arrangement was not financial, but rather the autonomy to develop the 25,000 acres it owns in central Florida without much of the oversight that other developers have. usually have.
Although the deal grants Disney several privileges, it does not make the theme park tax-exempt. Disney World paid more than $780 million in state and local taxes in fiscal year 2021, according to a company disclosure.
The Facebook post’s claim that Disney will now have to pay $200 million in taxes a year appears to be based on the false premise that Disney was not already paying taxes.
The $200 million figure appears to come from State Rep. Spencer Roach, a Republican from North Fort Myers. He told NBC News that Disney had avoided approximately $200 million in property taxes that surrounding counties might have collected.
The article noted that Roach’s Democratic colleagues and Central Florida officials had questioned his calculations and the claim that Disney had not paid property taxes.
Roach did not respond to our request for comment.
“There’s this perception that Reedy Creek somehow gave tax breaks to Disney,” said Orange County tax collector Scott Randolph. “It doesn’t do that.”
Under the new law, Disney’s deal with Florida ends on June 1, 2023.
The dissolution of the Reedy Creek District will likely have financial consequences for Orange and Osceola counties unless authorities take future action, according to the State Senate Financial Impact Analysis. For example, district bond debt could be transferred to those counties, depending on the analysis. Fitch Ratings, a credit rating provider, estimates the debt to be $1 billion.
The new law could also make those counties responsible for services previously covered by the company, such as road repair or law enforcement. Disney paid $105 million for these services, according to tax returns submitted to the Florida Department of Revenue.
“The bill will have an undetermined tax impact on residents and businesses currently served by a special district dissolved by the bill,” the Senate analysis said. “These residents and businesses may experience a change in services previously provided by the Special District and related assessments and taxes imposed.”
At a press conference, DeSantis pushed back against those concerns. He said he had “thought everything out”, hinting at future legislation.
A post on Facebook said that DeSantis “erased Disney’s tax exemption law. It will cost Disney $200 million in taxes. Per year!”
DeSantis hasn’t “erased” any tax-exempt status for Disney. This misinterprets the special tax district status that is being removed.
We could not find any evidence to support the $200 million tax figure cited in the claim. The financial impact of the legislation on Disney’s tax bill remains unclear.
We rate this claim as false.