News Reedy Creek Improvement District and the Central Florida Tourism Oversight District

[Stripes]

And it appears that RCID was looking to address that fact. There are tons of municipalities in FL that give discount passes to different attractions within FL. Are they all taxed? This type of benefit is often given without taxing the employees by many, many companies. Doesn't make it right, but it's not like RCID was doing anything out of the ordinary.

I receive regular tickets to local MLB games. It is not considered a taxable benefit. I work for a very, very large company.

 

[mkt]

I receive regular tickets to local MLB games. It is not considered a taxable benefit. A work for a very, very large company.

There may be some regulatory exceptions to the rule, but I'm far too tired and have stopped caring enough to bother looking up specifics.

In my case, I was given Detroit tigers tickets and NAIAS tickets from work and they appeared as "income" on my next paystub with taxes withheld. However, my employee discount on a car purchase - whose value was far higher than the tickets - was not considered taxable income.

 

[maxairmike]

I receive regular tickets to local MLB games. It is not considered a taxable benefit. A work for a very, very large company.

That’s what gets me. This feels like something that is either so commonplace that the rules aren’t clear enough/there’s no desire to enforce outside of digging for dirt, or there’s some serious misrepresentation happening by the CFTOD and/or their hired guns.

 

[mikejs78]

You should read the report. This topic spans several iterations of the relationship… including a period were disney was in fact doing payroll. And periods where rcid wasn’t paying for the perk at all.

There is a whole lot to digest in there

I read it. Where are the exhibits?

 

[flynnibus]

That’s what gets me. This feels like something that is either so commonplace that the rules aren’t clear enough/there’s no desire to enforce outside of digging for dirt, or there’s some serious misrepresentation happening by the CFTOD and/or their hired guns.

It’s a complicated topic that includes specific details about the employer… the benefit… etc. it’s very hard to generalize or compare across situations. Best handled by the accountants

 

[flynnibus]

I read it. Where are the exhibits?

The portion i am referring to is in the board packet. But dcbaker linked to the website with all the exhibits as well

 

[DCBaker]

I read it. Where are the exhibits?

There are individual links for each exhibit on the CFTOD website - you can find them all at this link.

 

[mkt]

I swear to god if I have to start paying tax on my maingate because of all this, the governor is going to have 70,000 angry people

Good news. Florida doesn't have an income tax, and DeSantis's voice has no power at the IRS.

 

[mikejs78]

The portion i am referring to is in the board packet. But dcbaker linked to the website with all the exhibits as well

So I looked at the exhibit which the board packet claimed that Disney administered the payroll and that it was once paid for by Disney. There is no supporting documentary evidence for this in the relevant exhibit (2-B). The exhibit claims that Disney ran payroll until 1998, and that it was free until then. This is supposedly based on interviews with "Employee 1" and "Employee 2".

All of the documentary evidence is from 2018-2021.

 

[Brian]

Government purchases are generally tax exempt.

However, complimentary admission media is considered a taxable benefit for employees (IRC §61). But that would be on the individual employees's tax returns, and not any documents that the CFTOD would be privy to.

RCID would have been responsible for withholding the tax, just the same as they would for other fringe benefits. This amount would also be included as part of the employee's W-2 statement. I don't believe that their public sector status would have any bearing on its taxability.

 

[Figgy1]

What a lot of people, looking at you the organization formerly known as RC, is that what was/is considered taxable has changed over the past 60 years. What may need to be counted as income since the last overhaul may not have before then.

 

[mikejs78]

This part is going to be interesting to watch play out. Since Disney provides this same benefit to its own cast.

There's an exemption in the IRS code for companies giving their employees a benefit that involves a company's own product and essentially results in no additional cost for the company. An example given by the IRS is airlines giving free airline tickets to employees on non-full flights - the "excess capacity" exemption.

So Disney themselves are likely ok.

 

[Bullseye1967]

There are individual links for each exhibit on the CFTOD website - you can find them all at this link.

You are a rock star!!!!! Thank you for all the gems you find!

 

[Stripes]

If this was an objective report, they would’ve spent most of the ink detailing how uniquely terrible and anti-American the current governance structure is. Instead, they babble on about how the new structure has brought accountability to the district. Oh yeah? Accountability to whom?

“Governments are instituted among Men, deriving their just powers from the consent of the governed.”
-Thomas Jefferson

There is no consent from the governed here, Mr. Jefferson.

 

[Figgy1]

I finally figured out what coftd reminds me of

 

[PsylockeSmythe]

I still don’t understand why the employees are responsible for paying taxes on the passes though? Wouldn’t the district pay tax on them when purchased from Disney? Does this mean other third party and Disney employees should be paying taxes on their passes? I don’t understand.

It is considered a fringe benefit, and the value of the passes should have been added into the employee's paycheck, either at the end of the year or the value broken down by how many pay periods they had and added that way.

I do the payroll here at our office, and at the end of the year, any employee who takes a company vehicle home every day, either has to keep a mileage log showing every trip, or they get their check grossed up each year for each day that they drove the vehicle home. We have found that it has been easier to do the amount per day, as it works out better for the employees and less hassle on my part. I'm going to take the assumption that the passes are treated like personal use of a company vehicle and taxed the same way.

Psy

 

[PsylockeSmythe]

If they're taxable income, it would be based on the cost of the passes, and not depend on how they're used or not.

It's still a question on if they're really taxable or not. If you assume they are, RCID would need to report that value to employees. So, it's not just an accusation that RCID employees were incorrectly reporting their taxes, it's an accusation that RCID accounting, the prior board, and anyone else who signed off on the RCID finances all did it wrong too.

I don't know the rules for when something becomes material and needs to be reported as part of your income. Nobody thinks if your employer gives you two movie tickets you need to include that in your taxable income. However, if they give you a car, that's probably taxable. There is definitely an IRS publication that would give you the details, or at least guidance on how to make the decision.

If we have a tax accountant reading, they'll probably know which publication to reference.

There should be a value assigned to them. Using my company vehicle example in my previous post, the amount is either $3 dollars a day or keeping the mileage log and any none company miles are at .655 cents per mile. So if you drive to and from work is 20 miles total that would be either $3 dollars or $13.10, that would get added to the employee's check as a non cash payment and all it does is gross up their check for the payroll taxes that they are responsible to pay. Since we use the $3 per day, by the end of the year, we do an payroll entry that adds around $750 to the employee's check, it grosses up their earnings by the $750 for tax purposes. So if the employee makes $40K a year and drives a company vehicle home, their W2 will show they made $40,750.00.

Psy

 

[ewensell3]

Meanwhile...

"artificial intelligence became omnipotent"

That is just embarrassing.

 

[lewisc]

The district was probably playing audit roulette. Burying the cost of the tickets in an expense category which doesn't produce taxable income to the employee.

The issue probably grew as the district cost for the tickets grew from zero

 

[mmascari]

There should be a value assigned to them. Using my company vehicle example in my previous post, the amount is either $3 dollars a day or keeping the mileage log and any none company miles are at .655 cents per mile.

Because you're giving "use of the car" and not "the car" to the employee. You're effectively saying it costs the company $3 a day to provide that use. So, that's the taxable benefit to the employee.

If you gave them the car. Not just to use, but to keep, transferred ownership. Then, the cost to the company would be the cost to acquire the car. That full cost of the car would be the taxable benefit. At least in years employees got new cars.

In this case, the District gave employees a pass. I've been assuming they bought a pass and then transferred that to the employee. In that model, the cost of the pass would be the taxable benefit. If instead, Disney billed them as it was used, so the cost was directly usage based, then the taxable benefit would also be usage based.

Assuming this is a taxable benefit, which does seem to be the current case.

If the employee derives more value out of the pass than that cost, it's a good deal for them and even if taxed would be tax advantageous.