After waiting 16 years for Virgin Galactic to begin space tourism flights from Spaceport America, New Mexico legislators have hit upon a new idea to try to get some revenues out of the place once the company begins commercial service later this year. The Las Cruces Sun-News reports
A bipartisan bill introduced in the state Legislature seeks to close a loophole that excluded spaceflight passenger tickets from gross receipts taxes. The move aims to harvest revenue from ticket sales as Virgin Galactic prepares to begin regular commercial service later this year.
H.B. 72 would amend a statute that excludes receipts “from launching, operating or recovering space vehicles or payloads in New Mexico” from gross receipts taxes, clarifying that sales “for transporting any person into or near space” would be taxable.
A 2019 ruling by the state Taxation and Revenue Department on the question of taxing flights to space essentially treated passengers as freight, stating: “… it seems reasonable to consider passenger revenues as receipts received for the operation of a space vehicle.”
“When those exemptions were drafted, it was not in anyone’s mind that people would be a payload,” state Rep. Jason Harper, R-Rio Rancho, told the Las Cruces Sun-News. Harper is a co-sponsor of the bill.
Virgin has sold about 700 tickets to customers at three different prices: $200,000 (until 2013); $250,000 (2013-2021); and $450,000 (2021-present). The amount of the tax would depend upon where it was leveled in Dona Ana County (where Virgin Galactic has its headquarters) or Sierra County (home of Spaceport America).
|County||Ticket Price||Gross Receipts Tax||Total Tax||Total Cost|
|Dona Ana County||$450,000||8.3125||$37,406.25||$487,405.25|
The state government would receive most of the tax revenues, with the county receiving a smaller portion.
After more than a decade of delay, Virgin Galactic says it plans to complete flight test of its SpaceShipTwo VSS Unity spacecraft this summer. Commercial suborbital tourism flights are set to begin in the fourth quarter of this year.