California Wants To Treat Rocketships Like Taxis
California plans for collecting taxes on spaceflight, SF Chronicle
“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.”
Title 18, California Code of Regulations Text of Regulation Section 25137-15
“1. Mileage ratio numerator. The numerator of the mileage ratio for each launch contract shall be the total projected mileage that all launch vehicles launched or planned to be launched pursuant to that launch contract will travel within this state. If a launch occurs or is planned to occur in this state, the contribution of that launch to the numerator of the mileage ratio shall be 62 statutory miles. If a launch occurs or is planned to occur outside of this state, the contribution of that launch to the numerator of the mileage ratio shall be zero.”
Keith’s note: This may seem silly – but stop and think for a moment: people are now treating space commerce as just another business thing that can be taxed. The space sector gets more “real” every day.
What’s new? They want to tax everything.
Yes, the California Franchise Tax Board philosophy – If it moves – Tax it. If it doesn’t move – Tax it at a higher rate. 🙂
Another reason not to live there.
Its why I left years ago. The money I saved in not paying California state income tax was enough to pay for my rent here in Texas.
I have my Spaceport Hawaii files from nearly 20 years ago if anyone is interested.
At least it isn’t New Jersey or Illinois.
I am not for a space tax. California has so much coast line it would be hard for any other state on the left coast to compete without sustaining an inclination “tax” penalty.
Not counting my chickens before they hatch Keith but we are getting close to that shift. It seems like everyday there is more gnashing of teeth on SLS while the commercial “brand” of space exploration and settlement seems to garner more Δv.
Doom on you SLS.
And by the way… SLS’s failure will not be Gert’s fault, Cook’s fault, May’s fault, or anyone at NASA. The reason SLS is where it is solely falls upon the House and the Senate.
Here is looking at you Senators Shelby and Nelson.
Isn’t it great to know that when entrepreneurs finally start making money from space the California Franchise Tax Board will be ready to take it away 🙂
AIUI the tax is applied at the Karman line, 100 km, and that this is where the highest rate is applied. Bottom line, it’s all the small companies at Mojave that get the knife to their neck. Nice way to encourage entrepreneurship!!
Yes, like XCOR they will be GTT (Gone to Texas) or a similar business friendly state.
California Tax Franchise Board doesn’t understand Space launch companies like SpaceX, ULA, Vector, and Virgin Galactic. Those Companies will not pay this mileage tax because it’s unfair and big burden expense on companies. More likely they will move out of the state to Texas, Alabama and Florida that our low taxes, less regulations, more business friendly and create lots jobs. It’s hurt California to more lose space companies by lose of income, property, sale taxs and massive job losses.
Hard to do polar launches from Texas, Alabama, and Florida. Easy from Vandenberg.
And Alaska?
There is actually a good polar launch corridor from Stennis in Mississippi and also from the Matagorda Peninsula in Texas at the site Space Services leased.
I wonder how launching from a federal facility will figure into any fight over payments. Also it’s not really interstate commerce but more like international commerce which the federal government has jurisdiction. I suspect California will have trouble getting the large companies to pay.
If I’m reading it correctly, the tax is on the distance goods are transported within the State of California. I.e. from the pad to the point where it crosses the state border. I assume the first few miles, within Vandenberg Air Force Base, wouldn’t be counted since it’s federal land.
That strikes me as a very strange way to do it, but it is analogous to transportation taxes on trains, trucks, etc.
Yes, but trucks and trains travel on roads and rails provided by the state, don’t they? Those things require maintenance so a tax/levy is understandable. The spaceflight tax doesn’t make sense other than as a revenue grab, and not a very “efficient” one at that (at least as far as economists define “efficient”).
California has to find some way to pay for its billion dollar budget shortfall.
Here’s a novel idea for politicians everywhere, not just in California – spend less and don’t run deficit budgets. You know, like most households.
Cheers
Alaska sounds good for commercial polar orbit launches. If I understand correctly Rocket Lab USA and Vector Space Systems are considering the Pacific Spaceport Complex on Kodiak Island. A California tax might make that decision a little easier.
And so the nonsense and greed continue. But, what does a real 3D state boarder look like? Is it from the center of the Earth up forming some kind of inverse pyramid to infinity? Does the state own the air above your head? When are they going to start taxing you for breathing? Such hubris.
Well, plan your trajectory to dogleg slightly West to outside the 12 mile limit. The part of the trajectory outside that area isn’t inside CA. Nor is the part inside Vandenberg AF Base. (edit) Looks like this won’t work. They assume the first 63 miles are in CA. Also, they will take a percentage of all other revenue if you do even one launch in CA.
California tax lawyers could get water out of a rock. Sssh dont tell them about subsequent orbital passess over CA.
You just had to bring that up, didn’t you! 😉
Leave it to California to think of it first.
The most outrageous thing about this isn’t the fact that they want to tax – there are appropriate road taxes and fees for highway users and the same is true for airports and ports and harbors – the state makes investments and needs to recoup these costs. Here, California has done NOTHING (Vandenberg is an Air Force federal property) and yet they still want to collect taxes! There even used to be a California Space Authority that tried to support the state’s space businesses – it eventually folded, partly due to the fact that they never got a cent from the state!
Let me tell you how it will be
There’s one for you, nineteen for me
‘Cause I’m the taxman, yeah, I’m the taxman
Should five per cent appear too small
Be thankful I don’t take it all
‘Cause I’m the taxman, yeah I’m the taxman
If you drive a car, I’ll tax the street,
If you try to sit, I’ll tax your seat.
If you get too cold I’ll tax the heat,
If you take a walk, I’ll tax your feet.
Don’t ask me what I want it for
If you don’t want to pay some more
‘Cause I’m the taxman, yeah, I’m the taxman