California wants to tax spaceflight, based on distance

Florida is widely seen as the state of choice for spaceflight in the USA, but California also plays host to its fair share of launches. Now, the state is investigating taxes on spaceflight, being based on distance travelled.

According to the San Francisco Chronicle (via Ars Technica), California’s Franchise Tax Board is seeking public comments on its space tax proposal. But what does the proposal entail?

It would see taxes being applied to any company operating in the state that generates at least half its cash from space transportation. The taxes would kick in when flights travel above the Karman line (100 kilometres in altitude).

As for the formula calculating the tax? Well, it’s based on distance travelled, but firms will pay less tax if they travel longer distances.

“More mileage will mean less tax, and less mileage will mean more tax,” a tax attorney told the publication.

Could we see spaceflight being taxed by distance in California soon?

What about confidentiality agreements which prohibit companies from revealing mission specifics? Well, they could be taxed as if they were flying to an altitude of 498 kilometres.

This is particularly noteworthy for the state, as it plays host to Vandenberg Air Force Base, being the site of many a classified military launch.

The tax attorney noted that the US federal government already has a tax system for space companies, adding that California was the only state working on a framework for state taxes.

Critics have questioned the wisdom of the move though, saying that it would make California a less attractive state for space activities than the likes of Florida and Texas.

Featured image: SpaceX