As we enter tax season, many Americans are hoping that they are able to get some money back, or that they will not owe too much back. Interestingly enough, some of the biggest corporations such as Walt Disney World are able to skirt by with very low tax brackets in the state of Florida, thanks to a tax loophole that the theme park has discovered.
As reported by the Orlando Sentinel, Disney is “avoiding some state and local taxes by selling theme-park tickets and other items to itself.” It seems that Walt Disney World sells hotel rooms, tickets, meal plans, and other travel package details to another Walt Disney Co. subsidiary called the Walt Disney Travel Co. Then, the company prices up the vacation packages and sells them to Guests at a new “retail price”.
Disney sells these packages to themselves for very low costs, as they are only taxed on that amount, and not the retail amount that Guests pay when booking a Walt Disney World vacation. The publication went on to note that this practice is similar to sites like Expedia who purchase rooms in bulk rates at a lower cost so that they can re-sell them on their site for a higher cost.
The way this works, calls for all vacation packages to have two items, which are typically hotel and ticket prices, but can be a plethora of other teams related to your travel. Then the tax is only owed on what the wholesaler pays for the individual offerings, and not the package as a whole. Then, “the travel dealer collects the taxes from the wholesaler, which recoups the money by bundling the tax amount into the overall package price.”
With 45 million Guests a year, Disney Travel Co. is the second-biggest tour seller, even though they only sell Disney vacations. The Orlando Sentinel noted that these tax breaks save the company hefty amounts each year.
Disney World avoids several million dollars a year in Florida sales and hotel taxes by calculating the taxes based on wholesale prices, according to one of the former company officials, who spoke only on the condition of anonymity for fear of retaliation from Disney.
Due to Florida state law, these transactions are, however, completely legal. Because of this, Universal Orlando Resort also take advantage of the loophole, selling their vacation packages to Universal Parks & Resorts Vacations Inc. who sells to the public. Despite these tax savings, Disney is still “Central Florida’s largest single taxpayer, paying $566 million a year in combined state and local taxes.”
When contacted, Disney spokesperson Andrea Finger said, “We support efforts that keep Florida competitive in the vacation marketplace and will continue to offer a variety of convenient vacation packages that bring visitors to Central Florida.” Because of this loophole, however, there are many who have spoken out and would like to see it “fixed”.
More on Walt Disney World Resort
While you are at Disney’s Hollywood Studios, you can enjoy Tower of Terror and Rock ‘n’ Roller Coaster Starring Aerosmith on Sunset Boulevard. By the Chinese Theater, Guests prepare to ride Mickey & Minnie’s Runaway Railway. In Toy Story Land, Slinky Dog Dash always boasts a long line with others shooting their shot on Midway Mania or spinning their brains out on Alien Swirling Saucers. Of course, you have to visit Star Wars: Galaxy’s Edge for some blue milk, or green milk, and ride Rise of the Resistance and Smuggler’s Run!
If you want to visit Disney’s Animal Kingdom, there is a ton to see and do! You can head over to Expedition Everest in Asia (when it is not under refurbishment) to visit the terrifying Yeti. Pandora will bring your Avatar dreams to life with Flight of Passage bringing Guests into the world of the Na’vi. DINOSAUR is still filled with giant dinos at every turn, and over at Kilimanjaro Safaris, you can take a ride on a real safari, and if you are lucky, a giraffe might even step in your way! A Celebration of Festival of the Lion King is now running, and the show is not one you should miss.
At Magic Kingdom there is so much to see and do! Cinderella Castle is decked out for the 50th anniversary and now, Festival of Fantasy and Mickey’s Magical Friendship Faire have returned. You can ride the three big mountains: Space Mountain, Splash Mountain, and Big Thunder Mountain, or calm things down on Peter Pan’s Flight. Rope drop the Park to get on Seven Dwarfs Mine Train and then enjoy a mid-day snack with some Dole Whip. Be sure to meet Mickey Mouse and enjoy the firework show, Disney Enchantment!
At the moment, EPCOT is now celebrating the International Flower and Garden Festival, and tons of construction is going on! Spaceship Earth now has the new Beacon of Magic lights illuminating the sphere and Future World is on the road to completion. Club Cool and the new Creations Shop is open to Guests as well as Remy’s Ratatouille Adventure in the France Pavilion! Guardians of the Galaxy: Cosmic Rewind will also debut this year! Plus, you can enjoy the stunning Harmonious show each evening!
World Showcase will soon also be joined by World Celebration, World Nature, and World Discovery. The construction on these three lands has been ongoing, and now, we are beginning to see certain aspects of the theme park taking shape.
Did you know that Florida theme parks were utilizing this large tax savings loophole?
Let the expert team at Academy Travel help you plan your next magical vacation to Walt Disney World Resort’s four theme parks — Magic Kingdom, EPCOT, Disney’s Animal Kingdom, and Disney’s Hollywood Studios — and the Disney Springs shopping and dining district!