New developments have come to light regarding the continuing concerns between Florida Governor Ron DeSantis, the Central Florida Tourism Oversight District (CFTOD) board, and Disney. Today, employees were hit with a 2 million dollar bill for back taxes owed on previous job perks.
Reedy Creek Improvement District
Here’s some background. Following the Reedy Creek Improvement District’s (or RCID) dissolution earlier this year, employees of the district lost perks like park tickets and covered discounts. After backlash over this change, the newly created Central Florida Tourism Oversight District (CFTOD), created by Governor Ron DeSantis, approved stipends for employees instead.
Today, the Orlando Sentinel reported on an internal memo informing district employees that, although the Disney World annual passes were complimentary to the employees and retirees, the perk required income tax payment that now results in over 2 million dollars worth of back taxes owed.
©Central Florida Tourism Oversight Board | Glen Gilzean
Central Florida Tourism Oversight District board administrator Glen Gilzean released an internal memo on the matter to employees of the RCID about their recent notice from the IRS. “[I]t has come to the attention of the district administration that the previous leadership chose not to inform staff about their IRS obligations to pay legally owed taxes on season pass benefits.” Gilzean continued, “This has resulted in our employees owing over $2 million in income back taxes.”
©Central Florida Tourism Oversight Board
Disney employees went on to notify leadership that they were not informed of an obligation in tax liability for the benefit according to Matthew Oberly, who is a district spokesman. Gilzean went on to assure employees and retirees concerned about the matter that they are actively working with the IRS to come up with a solution to cover the millions of dollars owed in back income taxes.
©Central Florida Tourism Oversight Board
Currently, around 400 people work for the Disney World district, which has been at the epicenter of DeSantis’ ongoing battle with Disney. The governor’s new hand-picked board replaced Disney-friendly members back in February of this year as part of a state takeover.
As this new board took effect, one of their first orders of business was to take a deeper look into and modify existing perks programs they felt were “unethical” and exclusively benefited Disney over other businesses. However, this decision to dissolve a beloved perk proved divisive when employees pointed out that the complimentary theme park passes played a key factor in their decision to work for the district.
Annual Pass card
When the new board opted to end the complimentary Disney World pass benefit for its employees, they proposed a $3,000 yearly stipend in its place which is still in bargaining stages for unionized employees.
The responsibility for the tax bill could fall on both the district and its employees, who could face tax implications if the IRS finds taxes were never paid on the Disney World park passes, according to Charlotte A. Erdmann, founding attorney of Orlando Tax Law.
©Central Florida Tourism Oversight Board
“The Disney passes were likely a taxable benefit, similar to wages or bonuses,” said Erdmann. “Due to the nature of the benefit, they were unlike cafeteria plans, medical benefits and other pre-tax benefits. They are also of substantial value.” However, Erdmann is not associated with the district nor has reviewed the matter in its entirety.
Reedy Creek Improvement District
If the resolution that is being worked out with the IRS results in the district paying the tax liability, that means the taxpayers would be footing the bill, according to Erdmann’s initial observations. It should also be noted that Disney and its affiliates pay about 86% of the district’s property taxes currently.
We’ll keep you updated on the developing story.
District Chief Responds to Accusations that DeSantis’ Reedy Creek Is “Incompetent”
Join the DFB Newsletter to get all the breaking news right in your inbox! Click here to Subscribe!
Do you feel like this tax bill will be left to taxpayers to resolve? Leave your thoughts in the comments.
Our handy (and portable!) ebook guides make sure you get the best deals and can plan a vacation of a lifetime.
Holy Cow.!!!$ wasn’t it the employees who cried foul on the previous board when it was operated by Disney. WOW, the grass isn’t as green as they thought it would be. Well just pass the cost on to the tax payers. Their pleased with Ron and company
Disney should pay back taxes because they didn’t notify the employees about the taxes when the perks were agreed too.
So when Disney ran Reedy Creek they paid 100% of property taxes and the taxes related to the free passes. The new board raised the tax millage to 13.57 when cities and counties in Florida are only allowed a 10% max. They are getting an extra 5.4 million so why can’t they pay the passes tax with some of that money. I would also like to know how much the board members are getting paid from the previous board members. The more this goes on it seems Florida taxpayers are paying for DeSantis personal fight with Disney. Also The Villages who have 6 Special Districts, did the same thing to their residents and raised their Mill to 25%. Seems special districts that are DeSantis friendly get to do whatever they want.
Treating the hardworking employees as the pinball in the middle, stinks. Disney or CFTOB needs to step up and do the right thing for these people. Using Disney parlance, this is really bad show how things are being handled during the transition. I am not going to pile on DeSantis and his look at and subsequent changes to Reedy Creek. Reedy Creek was a good program that benefitted both sides, but was in place for 60 years and was past due for another look. Reedy Creek did place Disney at a competitive advantage over Universal and they should be on a level playing field. Still, do the right thing for your people, people.
This is government overreach and plane pettiness. I wonder if they are going after universal employees. This is our tax dollars at work. People need to vote knowing that this stupidity is going on. Considering how much tax money rich people avoid paying, it’s asinine what going on , why go after the little guy
This is ridiculous!!!
There is no way the employees should have to pay anything! This falls on Desantia or Disney to cover it, IF the IRS comes back and says it is due.
This whole thing is horrible.
Disney is private property, what happens to the surrounding areas when they decide to go back to closed gates and maintaining their own roads and infrastructure? I’m not sure how that would look, but I do remember when you had to present ID and a reservation to get onto Disney property.
I hate this for all the Reedy Creek peeps.
What happens when they say no way, and go home. 🤷🏼♀️
Devils advocate.
Are we talking annual passes or maingate passes? Does Universals newly formed district with employees on their committees work the same way as the old Reedy Creek?
Anybody could have told you there’s taxes on that. Those are worth a lot of money.
They were probably discussing employee lay offs for all these that literally just stand around…
Wait, protests instead!🤣
So the appointed team that came in swinging like they were above all didn’t understand how bonuses worked? Why would they not think it would be taxable since they were so much more clever?
I don’t think this tax issue deals with bonuses, which everyone knows is taxable income in the year received by the employee. This article said this issue deals with the annual park passes the CFTOD employees receive as an employee benefit. If benefits are over a certain dollar amount ($25?) they become table income. Appearantly Disney paid these taxes for the employees in the past. I wonder if the value of the passes, and the taxes paid on them were reported correctly on the employees W-2 Statement of Earnings?