Every year, millions of people come to Central Florida to experience the magic of the theme parks. Tourist dollars roll in, and an entire industry exists to cater to those who descend on the sunshine state. With this tourism industry, comes a myriad of benefits for Florida residents. Specifically, Floridians are bestowed the benefit of paying no income tax, thanks to sales tax dollars paid for admissions, hotel rentals, and various other purchases made with tourism dollars. Counties collect tourist development taxes, or “bed tax” on hotels, which are used to fund maintenance of the shorelines and build stadiums for our sports teams. The hotels, restaurants, and entertainment all pay ad-valorem taxes, or property taxes, which go to fund schools and services. Theme parks such as Disney and Universal take up huge swaths of land, former swamps which have been built into utopias of the imagination. These parks are part of the collective nostalgia; places most people visited or dreamed of visiting as children, and still love as adults. But how does one put a dollar value on property such as Magic Kingdom or Epcot?
In a string of nine lawsuits filed in Orange County, Walt Disney Parks and Resorts US, Inc. seeks the determination of that very question. These cases seek to reduce the value of 37 separate pieces of property that Orange County has valued, in total, at just north of $5 billion. Most notably, the Magic Kingdom Theme Park, sitting on 142.32 acres, was valued at $414,170,241 in 2015, and increased 5.7% to $437,643.555 for 2016 tax year. This one parcel represents $6,150,948.86 in tax, an effective rate of roughly 1.5%. In all, the Disney properties represent $62 million in property taxes for Orange County. To put this into perspective, Orange County as a whole had revenues from ad valorem taxes for 2014-2015 of $352 million, making Disney’s contribution to the county just under 18%. Disney is the largest Taxpayer in Orange County.
This suit is nothing new. In fact, this is an annual event for Disney. Most notably, in the wake of the economic downturn in 2010, Disney’s profit margins were down. Prior to 2009, there was no 10% cap on the year over year increases to value of commercial property, and as such, the values of Disney’s property had significantly increased through the real estate boom. With these increases came high ad-valorem taxes. Disney management, in an effort to cut costs, filed suit to reduce the park’s property taxes. These suits effectively reduced the value of the Disney properties by $35 million. The approach was two pronged: 1) reclassify some of the land previously identified as high-value tourist attractions to be identified for a lower-value use, such as agricultural, and 2) reduce the value of the tourist attraction land and parking lots per acre. The push to reclassify land was successful, particularly at the Animal Kingdom Park, which was reduced from 340 acres of tourist attraction land to 200 acres, the balance of the land being reclassified as less expensive classifications. The park also successfully had per-acre tourist attraction property and parking properties reduced, ultimately saving millions in taxes.
The statutory basis for challenges to property values is section 193.011, Florida Statutes. The list includes several factors including, in relevant part, income from the property and the value of the property in an arm’s length transaction, the location, size, cost and condition of the property. This makes it nearly impossible to pinpoint value for a property like the Magic Kingdom that isn’t in part derived of its revenue. Much like the case with the 2010 push to lower ad-valorem taxes, park attendance at Disney is down recently. This is largely in part to a new pricing model, which has increased per attendee spending at the park. Unlike 2010, Disney parks-and-resort revenues are up 4%. Presumably Disney’s value at an arm’s length transaction is largely premised on its financials. That nostalgia based je ne sais quoi translates to dollars spent in the parks, hotels and restaurants. With revenues up, it is possible that Disney will again push to have some lands reclassified in an effort to reduce its liability this go around.
The Property Appraiser has not filed responses to any of the nine complaints filed by Disney. It remains to be seen whether Orange County’s biggest taxpayer is afforded some leniency by the Property Appraiser in the form of a settlement, or this has to be hashed out before a court. Both parties have a lot to lose, with Disney’s bottom line affected by the hefty tax bills, and Orange County relying on those high tax dollars to plan its budget for the upcoming year. In the meantime, Disney’s attorneys are likely abiding by the logic of the park’s resident Princess, Cinderella; “If you keep on believing, the dream that you wish will come true.”
| Parcel Name | Just Value | Assessed Value | 2015 Taxes |
| WDW Administration/Service Area | 48,906,479.00 | 28,238,591.00 | 129,846.00 |
| WDW North Service Area | 44,171,929.00 | 21,998,413.00 | 498,860.53 |
| WDW Bus Maintenance Facility- Recycle Way | 4,682,153.00 | 1,930,280.00 | 50,398.76 |
| Epcot | 451,092,171.00 | 405,862,520.00 | 6,214,178.19 |
| Magic Kingdom Theme Park | 414,170,241.00 | 414,170,241.00 | 5,961,442.20 |
| Hollywood Studios | 331,554,265.00 | 316,762,572.00 | 4,680,943.57 |
| Animal Kingdom | 312,850,038.00 | 259,070,653.00 | 4,170,944.25 |
| Blizzard Beach | 61,402,330.00 | 49,259,409.00 | 808,815.69 |
| MK Parking Lot | 50,250,410.00 | 26,858,491.00 | 578,827.85 |
| Typhoon Lagoon | 47,888,805.00 | 37,494,874.00 | 629,111.75 |
| Indy 200 | 23,602,305.00 | 16,337,488.00 | 284,690.86 |
| Ticket & Transposrtation Center | 22,280,747.00 | 12,574,139.00 | 260,757.29 |
| MK Bus Drop/Off Boat Docks | 14,496,820.00 | 14,496,820.00 | 208,662.89 |
| MK Car Care Center | 6,556,663.00 | 4,070,143.00 | 79,018.63 |
| Fantasia Golf | 5,968,250.00 | 4,546,614.00 | 77,125.60 |
| Epcot Wellness Center | 3,412,921.00 | 2,391,771.00 | 42,818.25 |
| Wedding Pavillion | 3,319,583.00 | 2,651,528.00 | 43,655.38 |
| Pop Century Resort | 296,420,271.00 | 216,607,397.00 | 3,773,684.08 |
| Art of Animation Resort | 253,415,340.00 | 161,293,437.00 | 3,078,667.14 |
| Animal Kingdom Lodge | 251,785,581.00 | 139,368,544.00 | 2,929,872.22 |
| Wildreness Lodge Resort | 185,529,359.00 | 99,535,949.00 | 2,139,384.42 |
| Grand Floridian Resort | 531,777,350.00 | 151,379,049.00 | 5,305,019.34 |
| Polynesian Resort | 167,337,157.00 | 76,624,385.00 | 1,848,385.98 |
| Contemporary Resort | 204,853,847.00 | 93,576,286.00 | 2,261,387.99 |
| WDW Yacht & Beach Club | 336,922,772.00 | 169,652,408.00 | 3,816,553.71 |
| WDW AK Lodge Animal Care Areas (North And West) | 27,502,563.00 | 5,593,014.00 | 157,680.91 |
| WDW Mk Entrance And Exit Roads | 19,531,847.00 | 6,563,370.00 | 168,713.67 |
| 10,560,000.00 | 844,096.00 | 75,156.02 | |
| 7,722,000.00 | 617,485.00 | 32,276.85 | |
| WDW Vacant Land West Of Epcot Parking | 8,574,309.00 | 911,460.00 | 75,974.70 |
| 2,230,492.00 | 36,566.00 | 18,556.00 | |
| WDW Fireworks Launch Area | 2,085,351.00 | 555,884.00 | 10,248.65 |
| TeamDisney Building | 64,803,773.00 | 28,113,758.00 | 709,174.07 |
| Casting Building | 18,305,578.00 | 12,107,088.00 | 208,372.57 |
| Port Orleans Resort | 312,535,569.00 | 282,997,329.00 | 4,346,348.02 |
| Coronado Springs Resort | 264,095,637.00 | 184,094,914.00 | 3,403,246.60 |
| Caribbean Beach Resort | 222,929,557.00 | 190,842,238.00 | 3,010,619.51 |
| 5,035,524,463.00 | 3,440,029,204.00 | 62,089,420.14 |
Authority:
Section 193.011, Florida Statutes – Factors to Consider in deriving Just valuation
Orlando Sentinel - Changes Cut Disney Tax Changes cut Disney's tax bill $1.8M over 2 years - Jason Garcia March 31, 2012
Orlando Sentinel - Disney World Attendance Slips - Sandra Pedicini May 10, 2016
Orange County Property Appraiser Records Search
Cases Filed by Disney:
16-5290 Walt Disney (Administration Service Area) v. Rick Signgh et al.
16-5291Walt Disney (Magic Kingdom and Epcot) v. Rick Singh et al.
16-5294Walt Disney (Pop Century Resport) v. Rick Singh et al.
16-5295Walt Disney (Animal Kingdom and Wilderness Lodge) v. Rick Singh et al.
16-5296Walt Disney (Grand Floridian Resort) v. Rick Singh et al.
16-5297Walt Disney (Yacht and Beach Club) v. Rick Singh et al.
16-5301Walt Disney (Animal Kingdom Lodge) v. Rick Singh et al.
16-5302Walt Disney (Team Building) v. Rick Singh et al.
16-5315Walt Disney (Port Orleans Resort) v. Rick Singh et al.
About the author: Ms. Levine is an associate attorney with the Law Offices of Moffa, Sutton, & Donnini, P.A. Her primary practice area is Florida tax controversy, with focus on real property issues. Ms. Levine received a B.S. in Accounting from University of Central Florida. She spent several years working in public accounting before attending Nova Southeastern University Law School. She received her Juris Doctorate in 2014. During her time at Nova Law, Ms. Levine was the Executive Justice of Academics for the Moot Court Honor Society, as well as the Finance Chair. She was awarded by the National Order of the Barrister, a national honor society which encourages oral advocacy and brief writing skills. You may contact Amanda via email at AmandaLevine@FloridaSalesTax.com or 954-642-1088 or read more about here on her BIO HERE.
Additional Resources
Burden of Proof-Persuasion: FL Ad Valorem Tax, published Aug 3, 2015, by James McAuley, Esq.
Miami-Dade Property Owners Take on Tax Collector, published on Apr 11, 2015, by Amanda Levine, Esq.
Florida Homestead Tax Exemption Case – Mary Jane, published March 15, 2015, by Amanda Levine, Esq.