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California aims to tax satellite launches

California aims to tax satellite launches

California tax authorities are lost in space.

President Donald Trump plans to pursue public-private partnerships for develop the space industry, which is likely to increase the development and profitability of these firms.

The State of California obviously foresees this possibility as well. Never having seen a tax that it will not try and collect, the state’s Franchise Tax Board is seeking public comment on its proposal for computing taxes on commercial space transportation companies (hat-tip, Legal Insurrection reader Robert).

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.

Interestingly, this will lead to double-taxation without representation and is so ham-handed that even a former member of the Obama Administration is complaining!

…The federal government already has its own taxes for commercial space companies, and until now no other state has proposed taxing commercial spaceflight. In fact most other states, including places like Florida, Texas, and Georgia, offer launch providers tax incentives to move business into their areas.

Phil Larson, a former Obama White House official who now is assistant dean of the University of Colorado’s College of Engineering and Applied Science, told Ars that California is discriminating against rocket companies by doubly taxing them. He also noted that such a tax would impede California’s ability to launch climate satellites, which Governor Jerry Brown has said he would do if President Trump cuts the ability of federal scientists to study Earth’s climate.

If California were actually spending the money collected responsibly, perhaps this quest might be less disturbing. However, our tax dollars go to benefits such as compression underwear and bracelets for transgender prisoners…. at the behest of a US District judge.

A U.S. district judge last week ordered California state prison officials to provide free chest-flattening underwear, also known as compression tops, to transgender inmates at women’s prisons and feminine accessories to transgender inmates at men’s prisons.

Requiring inmates to buy compression tops “effectively” denies those items to individuals who cannot afford them, according to U.S. District Judge Jon Tigar, who issued the order on Friday. Taxpayers, therefore, must foot the bill.

The order came out of a lawsuit concerning whether transgender prisoners should have access to certain clothing and accessories that the California Department of Corrections and Rehabilitation argues could be altered as a disguise, aiding in escape attempts, the Associated Press reported.

Authorities fear inmates could alter items like nightgowns, robes, and scarves to look like street clothes and escape prison. Still, Tigar expanded the list of products prisoners could receive to include those items, among others.

As part of the order, men’s prisons must provide bracelets, earrings, hair brushes, and hair clips for transgender inmates.

As a palate cleanser, here is some amazing video of NASA’s Cassini spacecraft as it made its first-ever dive through the gap between Saturn and its rings late last month.


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How might the industry fight this idiocy most effectively?


Send a delegation to Oregon to see what kind of tax incentives they might offer a launch company, while at the same time send a few engineers over to Coos Bay in Oregon or even Port Oxford. You see, for polar orbits, every mile closer to the North Pole you go, you save X pounds of fuel, and Y dollars.

Sure, it’s bluffing because of the monstrous amount of infrastructure they’ve already got in CA, but just because it’s a bluff doesn’t mean the ordinary CA voter won’t go screaming off to their representatives. If they’re going to hit the launch industry, there’s nothing that says the launch industry can’t hit back.

Twice as hard.

    Subotai Bahadur in reply to georgfelis. | May 6, 2017 at 1:24 pm

    Don’t bluff, just go. Nowhere on the West Coast is friendly to business, non-political science, or reality. They won’t bid against each other, or if they do they will renege on any deals once you are financially committed. Leave California, don’t move into Oregon or Washington. Keep American civilian space launch capabilities in America.

      Tom Servo in reply to Subotai Bahadur. | May 6, 2017 at 3:43 pm

      Hmm, I wonder if anybody ever thought of putting any spaceflight associated companies in some place like, say… Houston??? I wonder if a place like that would have any professionals associated with spaceflight living there, hmmm…

      and Padre Island is hundreds of miles long, mostly still empty, lots and lots of space for launch facilities there.

        For polar orbits, southern launch sites stink. For equatorial orbits, they’re great.

        Polar launches from the Florida cape have happened, they just burn a whole lot more fuel and travel over some of the most expensive and well-peopled real estate in the world. Not really where you want to drop an expended booster. (or a non-expended one)

Georgfelis, this is a very young industry. If they’re going to move, the time to do is it while they’re relatively small.

“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.”

Somehow if I were building a company big enough to take on space, knowing they’ll be a brand new tax and that they’re “ready” would encourage me to publicly and loudly make it known that with the money such an industry will bring into the state, maybe it’s time to move to a space friendlier state.

Satellite launches, like movies, will now be made in Texas.

    TX-rifraph in reply to Arminius. | May 6, 2017 at 1:34 pm

    A Texas launch site would be farther south perhaps requiring a little less thrust for an orbit(greater surface velocity).

I love a locale which is bound and determined to drive every single industry out. Go Kalifornia.

The neighboring desert states have oodles of empty space. The federally controlled land should be ripe for lease from the current administration. And, it is suitable for both safe launch and recovery operations. In the meantime, the people of Florida thank you.

    natdj in reply to Mac45. | May 6, 2017 at 1:37 pm

    We here in Florida welcome any California company. With Space X and now a massive complex being built at KSC for Blue Origin, you gotta think that these companies are not going to stick around where they may not be able to “lift off” financially due to extra taxes.

buckeyeminuteman | May 6, 2017 at 1:34 pm

Vandenburg AFB in CA, Cape Canaveral AFS and Kennedy Space Center in FL are all federal property. States can’t tax the actual launch although I suppose they could be dumb enough to tax all businesses in the space industry. Sounds like a sure way to chase profitable business away although that’s never stopped Failafornia before.

evil 5hit that i am, i’m going to add a public comment on the FTB web page that they should also tax satellites made here in #Failifornia for miles traveled…

because these idiots are just stupid enough to go there.

pass the popcorn please! 😎

    Old0311 in reply to redc1c4. | May 6, 2017 at 2:29 pm


    Kaitain in reply to redc1c4. | May 6, 2017 at 3:41 pm

    Boeing’s satellite division is in El Segundo across the field from LAX just south of the I-105. A tax like this if employed against them would give Boeing an excuse to shut down the facility.

I doubt this would survive the Federal courts. The Interstate Commerce clause gives the Fed sole jurisdiction over regulation of interstate and international commerce. Space is an obvious extension of that.