California Seeks To Tax Rocket Launches, Which Are Already Taxed (arstechnica.com)

The state of California is looking into taxing its thriving rocket industry. The Franchise Tax Board has issued a proposed regulation for public comment that would require companies that launch spacecraft to pay a tax based upon "mileage" traveled by that spacecraft from California. Ars Technica reports: The proposal says that California-based companies that launch spacecraft will have to pay a tax based upon "mileage" traveled by that spacecraft from California. (No, we're not exactly sure what this means, either). The proposed regulations were first reported by the San Francisco Chronicle, and Thomas Lo Grossman, a tax attorney at the Franchise Tax Board, told the newspaper that the rules are designed to mirror the ways taxes are levied on terrestrial transportation and logistics firms operating in California, like trucking or train companies. The tax board is seeking public input from now until June 16, when it is expected to vote on the proposed tax. 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.

Comments

Stupid

[JustAnotherOldGuy]

This is so stupid that it makes my head hurt. Way to fuck over the private space industry, California!

Re:Stupid

[The Snowman]

Way to fuck over the private space industry, California!

The private space industry will not be fucked over. They will leave, and go to places like Texas and Florida who, according to the summary, offer tax incentives to do business there.

The only entities who might be "fucked over" are the California citizens who might otherwise work at these companies. Although, if they are smart, they will move to Texas or Florida too.

Re:Stupid

[Phylter]

California is where new industries go to die. Why bother going there where companies that create jobs are punished? You're right, they'll go elsewhere and thrive instead of staying there.

Re:Stupid

[Anonymous Coward]

The problem is Californians bring their political diseases when they move to saner places.

Re:Stupid

[ZiakII]

Umm bad example you do realize that movies were originally made in NJ then due to patents and taxes moved to CA?

Re:Stupid

[thegarbz]

Right, just like Hollywood closed and now all movies are made in Vancouver.

You'd be amazed at the number of American block busters not even made on the continent let alone Vancouver or California. Your attempt at sarcasm fails due to it actually being very real. The industry is quite sensitive to tax breaks, and while Hollywood may be the heart of the industry, the production and a lot of the dollars actually go elsewhere.

That said it was funny seeing someone in Australia install yellow coverings on all our black traffic lights in a city to try and make the country look more like America.

Re:Stupid

[Trailer Trash]

My city (Franklin, TN, part of the Nashville/Franklin/Murfreesboro metro area) is aggressively recruiting California companies to relocate here. Our two biggest scores within the last couple of years were the Nissan North America headquarters (brought 1300 people from the president down) and the Carl's Jr./Hardees headquarters. CA is bad enough that we're getting companies of that size to literally pack up and move 3000 miles.

It doesn't hurt that we have no geographic boundaries to growth, so land is still pretty cheap. $500K will get you a 3 bedroom 1300 sq ft bungalow in Burbank. Here, it buys you a 3000 sq ft house on an acre, or more house and less land if you'd like.

And we have about the same sales tax rate as CA (9.25%), but no state income tax.

Would it surprise you to know that our economy is thriving?

Re:Stupid

[Trailer Trash]

California's GDP kinda disproves your entire premise.

Cali is where Companies go to grow. Conservatives like to think that "big government" (like the kind that paves roads, funds schools, funds fire depts.) are bad...

No conservative is against the sort of things that government is supposed to do, such as paving roads and funding schools. Hello, straw man. They do tend to be against stuff that government shouldn't be doing, like taxing rockets.

You know... MI which is poisoning its citizens with lead and NC which lost over a billion dollars in economic activity over their hate-filled law.

LOL! This is what happens when you believe media matters - you look like an idiot. They were claiming that NC would lose that much money over some period of years, but in fact it had no impact at all. A bunch of people who weren't going to visit there decided to not visit there. It's like the "boycott" the same group of lunatics had against Chick-Fil-A (which resulted in CFA's biggest single day sales ever). I'm actually going to visit NC this year specifically to offset any lunatics that actually did decide not to go, because I know their law wasn't "hate filled".

This is how a well run democratic republic is supposed to operate... Say "we have this idea... what do you think" and people tell them "fuck you, you're nuts"... /rant against stupidity which refuses to see things in any way other than the way they want.

The problem in CA is that there are so few people to say "fuck you, you're nuts" that they're not heard. And they don't have the money that the leftist looneys in the state have, and you can't talk to a Democrat without giving it money first.

Re:Stupid

[Scottingham]

NC lost numerous concerts, conferences, NCAA tournaments and other large events due directly to HB-2. None of that counts the individual people who decided not to vacation here. It was easily $1 Billion in economic activity lost. Easily. The NCAA tournament (which UNC won!) would have been held in NC except for, yep, HB-2.

No impact at all?

Oh that's easy

[Dunbal]

De-orbit it so it lands in California - preferably the governor's office in Sacramento. With a little sign saying "miles from California: ZERO".

Re:Oh that's easy

[michelcolman]

Amazing how nobody bothers to read the actual regulation, not even the article authors ("we're not exactly sure what that means either").

If I understand the actual regulation correctly:

For every launch from California, they take the number of miles traveled within the state of California and divide this by the total number of miles from launch to separation. This is one factor in the calculation, weighted at 80%.

Another factor, weighted by 20%, is the number of launches from California divided by the number of launches in total for that contract. That means that if you have one expensive launch from Texas and one cheap launch from California, under the same contract, California will take a disproportionate amount of tax because they will consider 50% of the total contract value for the "departure factor" part.

The regulation has an example with numbers. It looks like they want companies to launch high value missions from California and cheaper missions from elsewhere, since the "departure factor" appears to be the dominant factor in the calculation. And they want California launches to take place as close to the border as possible, minimizing distance traveled over the state.

Fair's fair

[fibonacci8]

I think it's fair to count the miles of road traveled just like the other forms of transportation. Travel off road should be exempted.

This is great news!

[Nova Express]

For Texas. Which has a space launch industry of its own, low taxes, and a business climate that's already luring companies from California...

Do what You Love

[SuperKendall]

Isn't this just California doing the thing it is best at?

Couldn't you simply write:

Way to fuck over the INSERT TYPE OF BUSINESS HERE industry?

That pretty much defines California. Hell, even Apple with more money than God built a campus in the shape of a wheel so they could role it out of the state when the taxes became too large a burden even for them.

Re:Do what You Love

[freeze128]

Even though the new Apple campus is shaped like a wheel, I don't think it will role. It might, however, roll.

They want rockets!

[SuperKendall]

California is all for rocket launches - as long as they are zero emission and electric only.

Cal-i-forn-ia. Yes, indeed.

[jet_silver]

California loves taxes.

In most other states, for example, beverage containers have a tax ("deposit") that is meant to get all the containers taken away from public spaces, whether by gleaners or by thrifty citizens. In contrast, California sets the tax low enough that it's not worth redeeming unless you're desperate - figuring enough people will blow it off that the state can just keep the majority of it.

Dave Barry said it best: California taxes are high, government is incompetent and corrupt in contrast to Florida: taxes low, government incompetent and corrupt.

Re:What's to stop companies from launching elsewhe

[nnull]

Industry itself. Name me one place in the US where you have everything at your finger tips, literally without taking a huge dent in logistical and operating costs. This is why I operate in California and this is why so many still operate in California. I've heard stories of those that moved to Henderson, NV and it's not all roses over there either, especially when your logistical costs sky rocket and the huge labor shortage is preventing you from operating (Amazon in Las Vegas didn't last long, did it?).

And this is where California and its ridiculous taxation is quite well calculated. Not too much to force your hand and just below the level, as annoying as it is.

Re:What's to stop companies from launching elsewhe

[Solandri]

The U.S. has two primary launch sites.

• Cape Canaveral in Florida. Launches into equatorial orbits are done here because it's the further south of the contiguous 48 states. The closer to the equator you launch from, the higher your eastward velocity, and the less energy you have to expend to achieve equatorial orbit. So the further south you can launch a rocket from, the greater its payload capacity using the same amount of fuel. (The southern tip of Texas would be another option, but any Eastward launch from there would pass over Florida, creating a hazard if a rocket blows up or crashes.)
• Vandenberg Air Force Base in California. Launches into polar orbits are done here because there's nothing to the south but open ocean, and it's part of the contiguous 48 states. Polar orbits are useful for earth-monitoring satellites (both for earth sciences and spying) because the satellite can cover all latitudes. Equatorial orbits generally limit you to about 15-30 degrees north or south of the equator. In theory you could do this over any of the states bordering the Gulf of Mexico, but that creates a hazard for the Carribean and Central/South American countries if a rocket blows up. The East coast (e.g. Maine) is not an option because you want to launch the rocket slightly to the west, so that the Earth will rotate underneath it allowing coverage of all longitudes.

If this tax does pass, expect companies like SpaceX to move out of California, and either Sea Launch to be revitalized or a new company doing the same thing as Sea Launch (launching rockets from a platform in the middle of the ocean) to spring up.

One 4th of July

[p51d007]

I was doing a ride-a-long with a local police chief in my hometown. We were driving around "the hang out spot" looking for kids firing off fireworks, which were illegal in the city, and called "littering". Saw this kid, teenager, firing off a bottle rocket. Had the headlights off, rolled right up next to him. Chief lowered the window, looked at the surprised kid, said..."I could write you a ticket for littering". Kid NEVER missed a beat. said.."how do you know it landed?". Chief looked at me, raised the window and we drove off, he said "well, can't argue with logic like that".