Employees at Gov. Ron DeSantis’ Disney World oversight district owe the Internal Revenue Service more than $2 million in back taxes, according to an internal memo obtained by the Orlando Sentinel.
The issue stems from Disney passes employees and retirees received for years as part of their benefits, district administrator Glen Gilzean wrote in an email Friday to employees explaining the situation.
“[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 wrote. “This has resulted in our employees owing over $2 million in income back taxes.”
The Central Florida Tourism Oversight District is working to resolve the matter by covering the back taxes owed by employees and retirees and is awaiting a response from the IRS, Gilzean wrote.
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“It was a top priority of our leadership team to ensure that our employees are not penalized for previous failures,” he said.
District employees have informed leadership that they were unaware of the tax liability, Matthew Oberly, a district spokesman said in an email.
“CFTOD team members have communicated they appreciate the administration’s willingness to absorb a significant financial burden that accumulated over the past several years,” he said.
Federal law bars the IRS from confirming or denying correspondence in tax-related matters, an IRS spokesman said. Disney did not immediately respond to a request for comment.
Roughly 400 people work for the Disney district, which has been at the center of DeSantis’ battle with Disney. His new hand-picked board replaced Disney-friendly members in February, part of a state takeover of what was previously known as the Reedy Creek Improvement District.
The new board took aim at a perks program that provided theme park passes and Disney discounts to employees. They accused the previous Disney-friendly administration of maintaining an “unethical” program that exclusively benefited Disney over other businesses. But the board faced a backlash from some employees who said the theme park passes were a key factor in their decision to work there.
The Disney perks cost $2.5 million in 2022, according to district officials.
In exchange for ending the program, the board approved a $3,000 yearly stipend. Unionized employees are waiting for that benefit, which is subject to bargaining.
Both the district and the employees could face tax implications if it’s true taxes were never paid on the Disney passes, said Charlotte A. Erdmann, the founding attorney of Orlando Tax Law.
“The Disney passes were likely a taxable benefit, similar to wages or bonuses,” said Erdmann, who is not affiliated with the district and has not reviewed the matter in its entirety. “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.”
If the district pays the tax liability, including that of its employees, the taxpayers would be footing the bill, Erdmann said. Disney and its affiliates pay about 86% of the district’s property taxes.
Gilzean reiterated to employees that he is working to fix the tax issue.
“I understand the stress that outstanding tax issues with the IRS can cause for our team,” Gilzean wrote. “Please be assured that we are diligently working to resolve this matter as soon as possible.”
