Spaceship Tax Break Proposed

August 24, 2010 Taxation in USA

Space shuttle liftoff from the Kennedy Space Center: Merritt Island, FloridaA new legislation have been proposed to allow for special tax treatments of commercial space exploration companies, in an effort to minimize future space-industry job losses and expand the entire sector.

U.S. Senator Bill Nelson recently proposed a new legislation to amend tax laws, which would allow investors to write off 20 percent of their outlays into commercial space flight firms operating in special enterprise zones (SEZ). It is hoped that the idea will eventually encourage growth of companies creating products adequate for use in NASA space missions. If the legislation is accepted, the SEZs will be designated by the US Congress, although it is envisioned that they will be centered on current space-flight research and development centers.

The proposal was sparked by the imminent closure of NASA space shuttle program, and the resulting widespread job losses for highly educated specialists. The state of Florida, home of the Kennedy Space Centre (KSC), is expected to see an approximate 9 000 jobs lost within a year. Significant employment drops will also be experienced in Texas and Alabama. Commenting on his own proposal, Bill Nelson said, “What we’re doing now is everything we can to ensure KSC’s continued importance to our nation’s space exploration effort, while also broadening the economic opportunities along our Space Coast.”

Under current NASA plans, upon completion of its next three shuttle launches, the US will rely on Russian, Japanese and European space agencies to transport its astronauts to the International Space Station. However, the US Congress has not yet decided on NASA’s budgetary allocation for the upcoming fiscal year, and Russia currently charges USD 51 million per seat on its space flights, which leaves NASA with serious budgetary concerns. It is envisioned that if the proposal is passed, a revived commercial space exploration industry in the US will alleviate the problem by providing US-owned space vehicles.

Photo by State Library and Archives of Florida