By Maria Caspani and Dawn Chmielewski

(Reuters) -Walt Disney Co is set to lose its special tax status in Florida after legislators there passed a bill on Thursday, delivering a major blow to the company embroiled in a dispute over a new state law limiting discussion of LGBTQ issues in schools.

Approval from Governor Ron DeSantis, a potential 2024 Republican presidential nominee who fiercely backs the ban on classroom instruction on sexual orientation and gender identity for children under age 9, is the final step to the bill’s enactment.

Disney came under fire last month by many in the LGBTQ community, including some Disney employees, for initially failing to take a public stand against the measure, then condemned the legislation and said it would pause all its political donations in Florida.

Several Republican-controlled states have made moves to restrict rights, often focused on transgender people, in battles that have pitted them against Democrats, ahead of Midterm and other elections later this year.

DeSantis, in a surprise move, had asked lawmakers to consider the legislation during a special session he called this week. It was filed and passed within just three days.

The Republican-led state House in Florida voted 70-38 to do away with a special tax district created by a 1967 law that allows Disney to self-govern the roughly 25,000-acre Orlando area where its Walt Disney World theme park complex is located. The state Senate passed the measure on Wednesday.

DeSantis on Thursday did not immediately comment on the bill’s passage. Disney declined to comment.

The law would eliminate a handful of special tax districts including the Reedy Creek Improvement District that covers about 25,000 acres in Orange and Osceola counties.

That structure makes Disney, which is one of the state’s largest private employers, and other landowners responsible for providing services such as fire-fighting, power, water and roads. They in turn get relief from taxes and fees.

The change would go into effect in June 2023.

It is unclear how the change will impact Disney financially but the status is believed to have saved it billions in taxes and fees.


Walt Disney World in Orlando, Florida, is the company’s largest theme park. Its sprawling businesses also include movie studios, broadcast and cable television networks, streaming services, cruise lines and retail products.

Disney has historically been a major political contributor in the state.

In the 2020 election cycle, the company donated $4.8 million in total, including campaign funds to more than 100 individual Florida legislative members, some of whom sponsored Thursday’s legislation, state records show.

The company also gave more than $900,000 to the state Republican party and more than $550,000 to the Republican senatorial campaign committee, along with $300,000 to the state Democratic party and $50,000 to DeSantis.

But its opposition to the new law, which was signed last month and dubbed “don’t say gay” by opponents, set off a storm of condemnation against the company by many Republicans.

It takes effect on July 1 and also prohibits such teaching that “is not age appropriate or developmentally appropriate” for older students. It is being challenged in court.

(Reporting by Maria Caspani in New York and Dawn Chmielewski in Los AngelesAdditional reporting by Joey AxWriting by Costas Pitas and Maria Caspani; Editing by Leslie Adler and Matthew Lewis)