Disney passes and discounts went unreported on employee wages, letter says

Walt Disney World annual pass (Landon McReynolds, WKMG)

Employees of the Central Florida Tourism Oversight District — formerly known as the Reedy Creek Improvement District — owe over $2 million in back taxes, according to a report last month.

The RCID was a special taxing district that oversaw the Walt Disney Company’s property in Orange and Osceola counties, though that changed earlier this year when lawmakers moved control over the district to the state.

On Nov. 28, the CFTOD wrote a letter to the IRS stating that 638 district employees hadn’t paid their fair share of taxes over the past few years.

In that letter, CFTOD officials said that the Walt Disney Company used to provide district employees theme park passes and discounts when the firm prepared its payroll taxes — just as Disney did with its employees.

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The payroll duties were later brought in-house at the district, though these passes and discounts were still provided to current and retired employees, the letter reads.

In addition, former district managers assumed that these passes and discounts didn’t have to be reported as taxable benefits, the letter says.

However, it was discovered in 2021 that the passes and discounts were supposed to have been reported to the IRS, though leaders were “distracted” by rumors about the district’s dissolution by lawmakers, CFTOD officials wrote.

After the state assumed control over the district in February 2023, the new board of supervisors decided to end the program for giving employees these passes and discounts, instead choosing to pay them stipends.

While the IRS wasn’t investigating the district, CFTOD officials explained they decided to pre-emptively write the IRS about the tax deficit to show “good faith.”

“The CFTOD’s acknowledgment of the error, coupled with the proactive steps taken to rectify the oversight by seeking professional assistance, underscores its commitment to ethical conduct and compliance with tax statutes and regulations,” the letter reads.

In total, the letter says that $2,146,449.66 of potential taxes were owed between 2020 and 2023.

CFTOD officials added that the district was willing to file the necessary tax forms to fix the problem, but issuing these corrected forms to all affected employees would cause too much confusion.

As a result, the CFTOD asked the IRS to issue a “closing agreement” to resolve the outstanding tax concerns. The issue is set to be addressed during the district’s board of supervisors meeting on Wednesday morning.

News 6 has reached out to the CFTOD for more information about how this deficit could impact employees and is awaiting a response.

In the meantime, the full letter can be read by scrolling down to the media viewer below.

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About the Author:

Anthony, a graduate of the University of Florida, joined ClickOrlando.com in April 2022.