Spaceflight Informed Consent, Tax Relief Measures Advance in California

Sen. Steve Knight

By Douglas Messier
Parabolic Arc Managing Editor

Last week, State Sen. Steve Knight introduced measures that would amend California’s spaceflight informed consent law to include vehicle manufacturers, suppliers and service providers, and also exempt aerospace products used in manufacturing and research and development (R&D) from sales and use taxes.

These measures are in addition to a separate bill that Knight introduced in December that would provide sales and use tax exemptions on equipment and materials used for the renovation, reconstruction and rehabilitation of commercial space launch sites.

The informed consent bill would add the following language to the law that Knight spearheaded the passage of last year:

“Space flight entity” shall also include a manufacturer or supplier of components, services, or vehicles that have been reviewed by the United States Federal Aviation Administration as part of issuing a license, permit, or other authorization pursuant to Chapter 509 (commencing with Section 50901) of Subtitle V of Title 51 of the United States Code.

The existing law provides spaceflight companies with limited liability protections from lawsuits filed if passengers are injured or killed during flights.

Knight also introduced a separate bill that would provide a five-year sales and use tax exemption on aerospace products used in R&D and manufacturing.

This bill would exempt from those taxes, on and after January 1, 2014, and before January 1, 2019, the gross receipts from the sale of, and the storage, use, or other consumption of, qualified tangible personal property purchased for use by a qualified person in the aerospace products and parts manufacturing industry for use primarily in any stage of manufacturing, processing, refining, fabricating, or recycling of property, as specified, or for use primarily in research and development, as specified, or to maintain, repair, measure, or test that property. The bill would also exempt from those taxes the gross receipts from the sale of, and the storage, use, or other consumption of, tangible personal property purchased for use by a contractor, as specified, for a qualified person. The bill would require the purchaser to furnish the retailer with an exemption certificate, as specified.

Knight introduced both measures on Feb. 20. The bills are now awaiting referrals to the relevant Senate committees for review.

Knight introduced a separate bill in December that would extend sales and use tax exemptions “to also include equipment and materials used to construct, reconstruct, or improve new or existing facilities designed to launch, manufacture, fabricate, assemble, or process equipment that facilitates the renovation, rehabilitation, or reconstruction of commercial space launch sites.”

The existing law already includes the following tax exemptions:

(A) Tangible personal property that has space flight capability, including, but not limited to, an orbital space facility, space propulsion system, space vehicle, satellite, or space station of any kind, and any component thereof.

(B) Tangible personal property to be placed or used aboard any facility, system, vehicle, satellite, or station described in subparagraph (A), regardless of whether that property is to be ultimately returned to this state for subsequent use, storage, or other consumption.

(C) Fuel of a quality that is not adaptable for use in ordinary motor vehicles, but is produced, sold, and used exclusively for space flight.

That measure is now before the Senate Governance and Finance Committee.