Disneyland to Hold talks with Anaheim City Council Over ‘Gate Tax’

Walt Disney Co (NYSE:DIS) had arranged a meeting with Anaheim city council on Tuesday, July 7 this week to discuss a new deal over the ‘gate tax.’

Disney’s plan is to convince the council to impose new taxes on them for the next year. In turn, the company for the next 30 years. To make a solid offer, Disney promised to invest $1 billion towards the development of more theme parks and infrastructure to boost its popularity.

The city council has influence over Disney’s profits apart from its other activities such as the city’s laws and budgets. The company has been on a tax break for more about 20 years. This is as a result of a deal that was struck in 1996 to exempt Disney from taxes on ticket sales (‘gate tax’). The 20-year deal will end June 2016.

In the previous deal, the company was able to employ more than 28,000 people as well as providing Anaheim with $148 million in sales, property taxes and property. Disney promised to set aside $1 billion for investments if the Anaheim council agrees to a 30-year extension of the gate tax. The amount will be used expand the Disneyland facilities and to create more attractions. The move is therefore expected to raise the number of visitors while at the same time reducing the congestion.

Anaheim’s mayor Tom Tait does not seem happy with the proposal. In one of his statements, claimed that he does not support tax breaks and corporate subsidies. He also said that he does not plan on imposing the ‘gate tax’ right away. His thoughts are that the council requires some extra revenue in the future, particularly to hire more police officers and bring up new amenities. He also added that the council needs to come up with $500 million for pension obligations. Three members of the council’s board were in support of Disney’s plan.

During the first meeting in 1996, Walt Disney Co (NYSE:DIS) had intended to obtain the tax break forever, but Mr. Tait is the one who convinced the council to give the company a 20-year ‘gate tax’ exemption.

About the Author

Coper graduated from the University of Chicagi with majors in political science and journalism.

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