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If you tax it, they will come. California's plan to tax space travel by the mile Login/Join 
Serenity now!
Picture of 4x5
posted
Another business-killing initiative from the folks who do it best.

http://www.sfchronicle.com/bus...e_editors_picks=true

quote:

California plans for collecting taxes on spaceflight

The earthly convention of paying taxes may soon extend into outer space, if California regulators have anything to say about it.

The state’s Franchise Tax Board is seeking public comment on its proposal for computing taxes on commercial space transportation companies.

The private spaceflight industry remains small, despite grand ambitions to shuttle everything from tourists to 3-D printers into space. But the board says it created the rules to give entrepreneurs the confidence that once their businesses really start to take off, California’s tax code will be ready to handle them.

The rules are designed to apply to any company operating in California that generates at least half the money it takes in from “space transportation” — defined as the movement of people or property 62 miles above the surface of the Earth. That’s the internationally recognized line that separates our planet from the rest of space. It would apply to companies that use California as a launchpad, not California companies launching from other states, like Texas or Florida.

Thomas Lo Grossman, a tax attorney at the Franchise Tax Board, said the proposed rules are designed to mirror the ways taxes are levied on terrestrial transportation and logistics firms operating in California, like trucking or train companies. Those rules are based largely on the way California and other states calculate taxes when goods are shipped from one state to another.

In what’s known as a market-based approach, companies tally sales — and then the taxes based on those sales — in the state where the good or service is received. But in the borderlessness of space, precisely where a product gets delivered is difficult to define.

According to the proposal, California will collect tax from space transportation companies based on a formula factoring in how often a company launches spacecrafts out of the state, and, most importantly, how far a commercial spacecraft travels from California soil. Between May and mid-October, there were eight launches from Vandenberg Air Force Base, in Santa Barbara County about 50 miles south of San Luis Obispo.

In short, the amount of tax on commercial spaceflight companies will decrease the farther the spacecraft travels from California. “More mileage will mean less tax, and less mileage will mean more tax,” Grossman said.

If a company can’t reveal the specifics of its mission due to confidentiality concerns — common with contracts with the military — a launch’s mileage will be presumed to be 310 miles under the proposed rules. (For reference, the International Space Station is about 250 miles above the Earth.)

The Franchise Tax Board says it received input from the private space companies on the proposed rules, which largely resemble a draft submitted by SpaceX, perhaps the industry’s most recognizable company. SpaceX, which is headquartered in Hawthorne (Los Angeles County), declined to comment.

The federal government already has its own system for taxing commercial spaceflight companies, Grossman said, but California was the only state he was aware of working to create a framework for taxing commercial spaceflight.

That may not last long, according to John Logsdon, a professor emeritus at George Washington University in Washington, D.C., and a co-founder of the school’s Space Policy Institute. States across the country are already competing to craft the most enticing regulatory regimes for the burgeoning commercial spaceflight industry.

“States that don’t levy taxes would have that competitive advantage over states that do,” Logsdon said. “If California puts in a tax and Florida or Texas doesn’t have a similar tax, I’m not sure that helps California in a competitive way.”

The Franchise Tax Board proposal said certainty about tax treatment “will lead to increased activity in the industry and will foster an atmosphere of growth and prosperity once present during the golden age of California’s aviation industry, thereby creating jobs as the industry thrives in this state.”

At least one company has already been lured away from California for the promise of greater financial incentives — though of a more earthly variety. Moon Express, a company working to mine the moon for natural resources, moved from Mountain View to Florida.

In an email, the company’s CEO and founder, Bob Richards, said the company “relocated from California to Florida in part due to the State of Florida’s progressive economic development incentives designed to attract commercial space companies.

“We are happy to be reaching for the moon as Space Coast residents now, thanks to the proactive efforts by Florida’s aerospace economic development agency, Space Florida,” Richards said.

California’s Franchise Tax Board is accepting comments on the proposed rules until June 5. The rules will be up for adoption at a public hearing on June 16.



Ladies and gentlemen, take my advice - pull down your pants and slide on the ice.
ʘ ͜ʖ ʘ
 
Posts: 4923 | Location: Highland, UT | Registered: September 14, 2006Reply With QuoteReport This Post
It's not easy being me
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Well, this gives me another reason to shoot my rocket from Florida. Besides, Cape Canaveral is much closer to me.

Hey,....I wonder if I could access the Marshall Space Flight Center in Huntsville?? That's only 90 minutes away!!Yeah, that's the ticket!--Now where did I put my secret "cache" of M-80's???


_______________________________________
Flammable, Inflammable, or Nonflammable.......
Hell, either it Flams or it doesn't!! (George Carlin)
 
Posts: 2769 | Location: Middle TN | Registered: March 22, 2009Reply With QuoteReport This Post
Purveyor of
Fine Avatars
Picture of Orguss
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It figures California would want to glean more money from the astronautical industry. It surprises me that JPL sticks around. And now SpaceX will be hindered by taxation. Jeff Bezos is sitting high and mighty right now since Blue Origin is based in Washington.

I wouldn't be surprised if there was a tax coming down the pipe that charged quad-copter pilots based on flight time/distance.



"I'm yet another resource-consuming kid in an overpopulated planet raised to an alarming extent by Hollywood and Madison Avenue, poised with my cynical and alienated peers to take over the world when you're old and weak!" - Calvin, "Calvin & Hobbes"
 
Posts: 18018 | Location: Sonoma County, CA | Registered: April 09, 2004Reply With QuoteReport This Post
Political Cynic
Picture of nhtagmember
posted Hide Post
launch a rocket, don't pay

whats the State going to do - wet their panties?

the state doesn't regulate spaceflight

they're just trying to suck some more money from business to offset their desire to become the leading welfare state on the planet - they don't actually want to have to work for the money by providing anything of tangible value

I see failure ahead for CA - which is a good thing - grasping at straws

hey, tax board - here's an idea - tax breathing - and lets start with all State employees first and lets see how that works out for ya



[B] Against ALL enemies, foreign and DOMESTIC


 
Posts: 53086 | Location: Tucson Arizona | Registered: January 16, 2002Reply With QuoteReport This Post
No double standards
posted Hide Post
Thanks for the article, it will be my lead business news story for my accounting classes next week. Smile




"Liberty lies in the hearts of men and women. When it dies there, no constitution, no law, no court can save it....While it lies there, it needs no constitution, no law, no court to save it"
- Judge Learned Hand, May 1944
 
Posts: 30668 | Location: UT | Registered: November 11, 2003Reply With QuoteReport This Post
Unflappable Enginerd
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quote:
Originally posted by Scoutmaster:
Thanks for the article, it will be my lead business news story for my accounting classes next week. Smile

How to NOT do things. Wink


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Posts: 6192 | Location: Headland, AL | Registered: April 19, 2006Reply With QuoteReport This Post
No double standards
posted Hide Post
quote:
Originally posted by nhtagmember:....hey, tax board - here's an idea - tax breathing - and lets start with all State employees first and lets see how that works out for ya

Sidenote. I filed my taxes online, got my fed refund direct deposit about a week later. Seems CA says they will take about three months to process the electronic return and send the refund. I think CA gov't has bigger money problems than they admit.




"Liberty lies in the hearts of men and women. When it dies there, no constitution, no law, no court can save it....While it lies there, it needs no constitution, no law, no court to save it"
- Judge Learned Hand, May 1944
 
Posts: 30668 | Location: UT | Registered: November 11, 2003Reply With QuoteReport This Post
Member
Picture of SIGguy229
posted Hide Post
I guess California doesn't want business?
 
Posts: 1721 | Location: South.....Carolina | Registered: May 25, 2006Reply With QuoteReport This Post
Dances With
Tornados
posted Hide Post
Wait til they start taxing Tallywhacker sizes.

I'd probably get a refund instead of the paying the luxury tax. Roll Eyes
 
Posts: 11812 | Registered: October 26, 2009Reply With QuoteReport This Post
Member
Picture of cparktd
posted Hide Post
quote:
Originally posted by nhtagmember:
launch a rocket, don't pay

whats the State going to do - wet their panties?



No, they will drag you into court, bankrupt you and or seize your assets.
Thats what.



If it ain't woke... don't fix it.
 
Posts: 4118 | Location: Middle Tennessee | Registered: February 07, 2013Reply With QuoteReport This Post
Baroque Bloke
Picture of Pipe Smoker
posted Hide Post
quote:
Originally posted by Scoutmaster:
Sidenote. I filed my taxes online, got my fed refund direct deposit about a week later. Seems CA says they will take about three months to process the electronic return and send the refund. I think CA gov't has bigger money problems than they admit.


I applied my 2016 over payment to my 2017 P1 quarterly payment. In effect, I got my refund instantly.



Serious about crackers
 
Posts: 8854 | Location: San Diego | Registered: July 26, 2014Reply With QuoteReport This Post
Go ahead punk, make my day
posted Hide Post
I wonder how long it will take SpaceX to vacate CA...

But what will really happen is they will pass the tax on to their customers (.gov and .civ).

And they'll likely just do all of their .civ launches from 39A at Canaveral.
 
Posts: 45798 | Registered: July 12, 2008Reply With QuoteReport This Post
Political Cynic
Picture of nhtagmember
posted Hide Post
I don't see the State dragging SpaceX into court

its launching its rockets from a federal instalaltion

and besides, Elon Mush has more money in his checking account than the state of California has in its 'treasury'

it would be a short fight before Musk OWNS California



[B] Against ALL enemies, foreign and DOMESTIC


 
Posts: 53086 | Location: Tucson Arizona | Registered: January 16, 2002Reply With QuoteReport This Post
I'd rather have luck
than skill any day
Picture of mjlennon
posted Hide Post
Seems to me space is out of their jurisdiction.
 
Posts: 1817 | Location: Fayetteville, Georgia | Registered: December 08, 2005Reply With QuoteReport This Post
Member
Picture of aileron
posted Hide Post
Virgin Galactic has a lot of operations in SoCal, including their manufacturing arm, The Spaceship Company, at the Mojave Spaceport. Sir Richard won't like the FTB climbing up his ass.
 
Posts: 1472 | Location: Montana - bear country | Registered: March 20, 2013Reply With QuoteReport This Post
Move Up or
Move Over
posted Hide Post
But the board says it created the rules to give entrepreneurs the confidence that once their businesses really start to take off, California’s tax code will be ready to handle them.

I can just see Elon Musk's to do list:

1) learn to launch rocket without it blowing up
2) learn to retrieve rocket without it blowing up
3) worry about if the state of California has a tax plan in place for when I start making money...
 
Posts: 4954 | Location: middle Tennessee | Registered: October 28, 2008Reply With QuoteReport This Post
Dies Irae
Picture of Opus Dei
posted Hide Post
quote:
Originally posted by mjlennon:
Seems to me space is out of their jurisdiction.
Would to me, also. There was a case some time back about a photographer overflying an Indian reservation in the Grand Canyon and the issue of airspace sovereignty came up.

Now, could California acknowledge federal sovereignty and yet declare travel through the atmosphere above it subject to taxation? Something like the statutory 12 mile territorial water issue? This is way out of my league, so IDK if there's already case law beyond the Arizona Indian tribe's litigation or if California would be able to tax such commerce.
 
Posts: 5750 | Location: Fort Heathen, Texas | Registered: February 25, 2008Reply With QuoteReport This Post
אַרְיֵה
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posted Hide Post
In the 1960s I worked for a flight school that specialized in instrument training, at Chicago's Midway airport. The state of Wisconsin decided that it would be a good idea to tax flights.

We immediately changed our list of training routes. We no longer went to Wisconsin, so we spent no money at all on fuel purchases in Wisconsin, no restaurant expenditures for lunch stops in Wisconsin, no other money spent in Wisconsin. The state thus did not reap any of the new tax revenue, and they also lost the sales tax money that we had previously been paying for fuel, restaurant food, etc., to say nothing of the "trickle down" effect from the sales that they lost.

The school that I worked for was a drop in the bucket; we were not the only ones. Many other aviation businesses stopped spending money in Wisconsin.



הרחפת שלי מלאה בצלופחים
 
Posts: 30545 | Location: Central Florida, Orlando area | Registered: January 03, 2010Reply With QuoteReport This Post
Too old to run,
too mean to quit!
posted Hide Post
quote:
Originally posted by Scoutmaster:
quote:
Originally posted by nhtagmember:....hey, tax board - here's an idea - tax breathing - and lets start with all State employees first and lets see how that works out for ya

Sidenote. I filed my taxes online, got my fed refund direct deposit about a week later. Seems CA says they will take about three months to process the electronic return and send the refund. I think CA gov't has bigger money problems than they admit.


According to my somewhat foggy memory, kalifornistan is some TWO TRILLION DOLLARS IN DEBT.

They gotta figure out some way to pay at least the interest on that debt.

How many companies have beat feet out of that dump now?

And the mass migration has not really started yet.


Elk

There has never been an occasion where a people gave up their weapons in the interest of peace that didn't end in their massacre. (Louis L'Amour)

"To compel a man to furnish contributions of money for the propagation of opinions which he disbelieves and abhors, is sinful and tyrannical. "
-Thomas Jefferson

"America is great because she is good. If America ceases to be good, America will cease to be great." Alexis de Tocqueville

FBHO!!!



The Idaho Elk Hunter
 
Posts: 25640 | Location: Virginia | Registered: December 16, 2001Reply With QuoteReport This Post
Member
posted Hide Post
quote:
But the board says it created the rules to give entrepreneurs the confidence that once their businesses really start to take off, California’s tax code will be ready to handle them.


It's nice to know once I get my business off the ground, California will be there ready to tax the hell out of it.
 
Posts: 7011 | Registered: April 02, 2011Reply With QuoteReport This Post
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