Bridget Stomberg, associate professor of accounting and the Glaubinger Chair for Undergraduate Leadership at the Indiana University Kelley School of Business, research explores the effects of tax policies and enforcement on corporate activities.

She and her frequent research colleague Lisa De Simone of the University of Texas host a podcast, “Taxes for the Masses.”

Below are responses to questions some may have about the situation:

Have there been other similar cases where a corporation sues the local government? 

"As I understand, companies cannot sue the government and in this case Disney is suing Ron De Santi’s and other government officials for retaliation."

How is this situation with Disney World being a "special tax district" unique?

"In 1967, Disney worked with the Florida legislature to create a special taxing district, called the Reedy Creek Improvement District. Creating the district prevented Florida taxpayers from having to pay for the extensive costs of infrastructure and services that would be required to support the Magic Kingdom, which opened in 1971. It also helped resolve funding and allocation issues that could have arisen because the 40 square miles of land Disney owns spans two Florida counties – Osceola County and Orange County.  The district also provided significant benefits to Disney in terms of flexibility and independence.

"The district’s operating budget for 2022 was close to $170 million, most of which comes from the taxes and fees that the district levies within its borders. Thus, the special district essentially allowed Disney to tax itself to fund infrastructure and services on Disney property. The primary benefit of the special district is independence and autonomy.

"In April of 2022, Florida Governor Ron De Santis called on lawmakers to eliminate all special districts that were enacted in Florida prior to 1968. Some people speculate that the actions was retribution for Disney exercising its first amendment right to speak out against another Florida law change endorsed by De Santis – the so-called Don’t Say Gay bill. After the bill passed the House, Disney CEO Bob Chapek told employees that the company would not take a position on the bill. That did not go over well with Disney employees and Chapek reversed course, characterizing the bill as a “challenge to basic human rights” and stating that Disney’s goal was to have the law repealed or struck down in the courts."

How will this affect Disney's autonomy in the central Florida area?

"Revoking Disney’s special tax district will limit its autonomy to fund its own projects. Now that the Florida legislature has agreed to dissolve the district, the taxpayers of Osceola and Orange Counties will have to fund Disney’s services and infrastructure. Additionally, Reedy Creek has about $1 billion in municipal debt that it issued to build some of its existing infrastructure. State law stipulates that when a special district is dissolved, the local government takes responsibility for repaying the debt. Orange County mayor Jerry Demings said that taking over Reedy Creek’s police, fire and 911 services would be ‘catastrophic’ for the county’s budget. By some estimates Orange County would have to raise its property taxes by 20% to 25% to raise the same amount of revenue that Disney was able to raise through the special district.”