Disney sues over property assessments for Magic Kingdom, other properties

[Monorail_Orange]

I think I like this Rick Singh guy. It seems as if Disney was counting on a continued "wink-wink nudge-nudge" cozy relationship with the county assessor. From what I've read thus far, I'm not liking their chances of winning this one.

You say that, but remember, ultimately any increased cost of business will be passed on to the consumer. In other words, Singh is really just further screwing those of us who visit the swamps.

Edited to add: Also, I note that he complains the Magic Kingdom was valued less than a particular theater, but there's a counter argument that the MK should have a reduced tax burden because they do not consume nearly as much county resources (i.e. WDW via RCID handles all of the resort infrastructure).

 

[HauntedPirate]

Exactly.

If the county is artificially inflating the value of the property this cost is pushed to the consumer and is essentially illegally increasing the resort/bed tax.

As one of many DVC owners on this site, I have a bit of skin in this game. And I absolutely agree - If the county is artificially inflating the property value, then it should be fought. Conversely, if Disney has been able to "negotiate" with previous assessor(s) and as a result has kept its property values artificially low in years past (and therefore been able to keep DVC dues lower than they otherwise should have been and thus made DVC ownership a bit "more attractive"), then the same principal applies. I don't want to pay more for my DVC interest, by any means, I just want things to be on the up-and-up and have fair property valuations all around.

 

[TheGuyThatMakesSwords]

There is a way to deal with this, in the event of a lost case.... yes, it would be a bit ugly .

Increase prices to cover the assessments. But only do so for day tickets, and FL residents.

Now, this sounds unfair on the surface, because it is clearly targeted at FL residents. One must step back, and understand that the State is attempting to shift their tax burden to NON residents. Actually very common in states with a lot of tourism. Best way to defeat this is to make the situation "not in the interest" of the state of FL. Which may require a bit of pain .
All personal opinion - I'm not necessarily right, no one else is necessarily wrong.

 

[asianway]

How so [Honest question]?

Ticket sales produce profit which is typically the basis for valuating commercial real estate for sale. The County will typically use similar sales for valuations, so there is a correlation.

 

[Alpineslide]

I'm of the belief that property taxes have nothing to do with what property values are.

I believe property taxes are entirely based on how much money the county wants to take from you (or in this case WDW ).Depending on where you are they can't necessarily increase their property tax rate, so they circumvent that by artificially increasing the value of the property. It's essentially a legal loophole used to take more money from citizens or businesses.

 

[misterID]

I think many of you are confusing ticket sales with property values...

Nah, just the irony in the article is funny. I think many of us know the difference.

 

[stini228]

Our property taxes increased by 25% last year. (Orange county). Wish there were caps on these things

 

[LAKid53]

Here in Florida, my property tax is calculated based upon the millage rate determined by the Board of County Commissioners, the School Board and the Water Management District. That millage includes a tax for the school district, water management district, emergency medical services, downtown improvement district.
My property taxes are based upon market value and if I remember the statute correctly, that market value is reviewed every 5 years. Commercial properties are assessed utilizing cost, income, and market information to determine the value of property.

A bed tax is not part of the property tax assessment.

 

[ford91exploder]

Well someone has to pay for the social services the vastly underpaid Disney CM's need to utilize in lieu of Wages.

Ive always felt that corporations should be subject to a surtax if more than 20 % of their workforce was eligible for welfare benefits.

For companies like Disney and WalMart having government subsidize employment costs is part of their business model

 

[DisneyCane]

Here in Florida, my property tax is calculated based upon the millage rate determined by the Board of County Commissioners, the School Board and the Water Management District. That millage includes a tax for the school district, water management district, emergency medical services, downtown improvement district.
My property taxes are based upon market value and if I remember the statute correctly, that market value is reviewed every 5 years. Commercial properties are assessed utilizing cost, income, and market information to determine the value of property.

Luckily, for residential property the Save Our Homes law limits the increase in assessed value to 3% a year. They can increase the millage rates but that effects everybody that pays property tax. Residential property is protected from the county appraiser going after a particular person or neighborhood because they think they should pay more due to SOH.

Commercial property gets no such protection. I personally believe that property taxes should be based on what was paid for the property, including what was paid to improve the property (building a home on an empty lot for example). Somebody can buy land to build a restaurant in a slow part of town for let's say $100,000 and builds a $200,000 building on it.

If, in 5 years, developers start buying up and improving the surrounding area, the county appraiser will decide that the land value has gone up to $600,000. That might be true IF the property is sold. However, my example business was formed based on a land/building value of $300,000. The county appraiser can double their property taxes because they CAN sell their land and building for more than they paid. They may be forced out of business and forced to sell if they can't handle the, now doubled, property taxes.

 

[asianway]

I'm of the belief that property taxes have nothing to do with what property values are.

I believe property taxes are entirely based on how much money the county wants to take from you (or in this case WDW ).Depending on where you are they can't necessarily increase their property tax rate, so they circumvent that by artificially increasing the value of the property. It's essentially a legal loophole used to take more money from citizens or businesses.

Bingo

 

[Tavernacle12]

I'm confused, how is their worth evaluated? Is it based on the land they sit on or their profits or what the parks are worth? I assume the appraisal is WAY too low if it's the latter, if you put individual parts of MK up for auction you'd get over a billion back easily.

 

[AshaNeOmah]

20 % of their workforce was eligible for welfare benefits

So the government gets to determine the threshold for benefits then punish companies who go over 20%? Where's the check and balance there? Set the limit and $100k and tax every company!

 

[larandtra]

All I can do is sit here reading though some of these responses and chuckle at the misunderstanding of basic business economics on both sides of the discussion. There is always a middle ground because the extremes on both sides are factually challenged about how business works and the ideas tossed out are absolutely unmanageable in the real business world.

 

[Jedi Stitch]

Now would be the time to send Disney an Offer for the current assessed value of the WDW property, and see if they just laugh in your face for being too low.

 

[ford91exploder]

So the government gets to determine the threshold for benefits then punish companies who go over 20%? Where's the check and balance there? Set the limit and $100k and tax every company!

The limit was set by 'eligible for government benefits' that generally is defined as income below the poverty line

 

[ford91exploder]

I'm confused, how is their worth evaluated? Is it based on the land they sit on or their profits or what the parks are worth? I assume the appraisal is WAY too low if it's the latter, if you put individual parts of MK up for auction you'd get over a billion back easily.

Commericial property is worth whatever the assessor says its worth, It's up to the owner to fight the assessment in the appeals board if that fails in court

 

[POLY LOVER]

They should be taxed their fair share but not more. Let's not kill the goose that laid the golden egg.

 

[DVC Mike]

I'm confused, how is their worth evaluated? Is it based on the land they sit on or their profits or what the parks are worth? I assume the appraisal is WAY too low if it's the latter, if you put individual parts of MK up for auction you'd get over a billion back easily.

Looking at the hotels, there are three approaches used in a property tax appraisal: the cost approach, the sales comparison approach, and the income capitalization approach. And the income capitalization approach is a preferred approach in valuation of hotels for property tax purposes. So, Singh's approach seems fine.

Disney’s argument seems to be that Singh incorrectly “included the value of certain intangible property in the assessments”. Several recent appeals of hotel appraisals are taking this approach. The assessor is required to identify, value and exclude the value of any intangible assets from the calculation. They are appealing the assessor’s methodology saying he didn’t remove all intangible assets and rights.

 

[Cosmic Commando]

Can't feel too bad for the county... imagine all the money that flows in from bed tax, sales tax, rental cars, etc.