Disney challenging property tax valuations

[drusba]

The current decision relating to Beach Club and Yacht Club does not specifically apply to BCV, except that there are numerous other pending cases brought by Disney entities, including probably those brought concerning the DVC resorts (I know there is one for Boardwalk Villas), and cases brought by essentially every theme park, hotel and timeshare resort in Orange County FL, and also numerous other businesses, all basically raising the same issue in that the methodolgy adopted by Rick Singh to greatly increase the assessed property values that existed before he was elected is both a violation of the Florida Constitution and a violation of the statute defining how valuations are to be done, an issue for which Disney becomes the first to win. An appeal is inevitable because the ruling basically means Singh faces losing all his other cases, defeating his campaign promise to greatly raise property values for businesses so that they will all pay their "fair share" of taxes (of course, he can always blame it on the flawed judiciary).

Absent a quick settlement of the Disney cases, it is likely this will go on for some time and we should not expect any noticeable benefit to DVC in the near future (any appeal of the current case likely will not be decided until sometime next year). Also note, that even if assessed values of DVC resorts are determined to be too high, you will not receive any specific refund of taxes paid. What happens when it is determined that you paid more in dues than was owed in taxes for any particular year is that a deduction in dues will occur in the next year to reflect the previous overpayment.

 

[miTnosnhoJ]

There is a general taxation battle going on right now, but I am not sure how much this would play into the specific case of the Disney Resorts, or DVC.

Let’s take the case of a successful Walmart store, on a prime location in a nice suburban area.
From a tax assessor’s perspective, this property is highly valuable, and should be taxed accordingly because of its high value. It is bustling. The parking lot is full. The store is highly profitable. The land must be highly valuable.

But if you are a tax attorney for WalMart, you say “Not so fast”.
The business that is done by the successful Walmart is already subject to Federal and State Income Taxes. So they would argue that it is not fair to now impute the same revenues and profits into a land valuation formula - it could be construed as double taxation.

So how do you value the WalMart building and land? The Walmart attorney would argue that you must look at actual comparable land and building sales. But guess what - successful WalMarts aren’t for sale. The only big box stores that are for sale are distressed properties in abandoned strip malls in less desirable locations. Every city has them. So WalMart says THAT is the true value of the building and land. It almost seems laughable that a highly profitable Walmart would only be worth what an abandoned store is worth, but this valuation method has the advantage that there is actual comparable market data.

So far, the courts have tended to rule in favor of the WalMarts.

As I said, I am not sure how relevant this is to the Disney cases, and IANAL.

 

[CarolMN]

IANAL or CPA or any other kind of expert in the area of taxation, either.

My understanding of the dispute is that the Assessor has changed the property tax methodology to include the revenue that the property generates. As you might imagine, that can be a LOT for the theme parks and resort hotels.

IMO, since that revenue is already subject to county sales taxes, including it in the property tax valuations seems like double taxation.

 

[KAT4DISNEY]

IANAL or CPA or any other kind of expert in the area of taxation, either.

My understanding of the dispute is that the Assessor has changed the property tax methodology to include the revenue that the property generates. As you might imagine, that can be a LOT for the theme parks and resort hotels.

IMO, since that revenue is already subject to county sales taxes, including it in the property tax valuations seems like double taxation.

I'd agree. That would be covered under the Florida corporate tax and shouldn't be a factor in Property tax.