Zero-G, Zero Tax Proposition
FRANCHISE TAX EXEMPTIONS FOR SPACEFLIGHT ACTIVITIES IN TEXAS
Section 1. Section 171.1011, Tax Code, is amended by adding Subsection (r-1) to read as follows:
(r-1) In this subsection, “launch,” “launch services,” “launch site,” “payload,” and “space flight participant” have the meanings assigned in 49 U.S.C Section 70102. A taxable entity shall exclude from its total revenue, to the extent included under Subsection (c)(1)(A), (c)(2)(A), or (c)(3), the total revenue received from:
(1) the sale of launch services that:
a. are performed in this state or originate from an airport or spaceport in this state; and
b. are provided to:
i. a spaceflight participant; or
ii. another person for the purpose of providing the person with training regarding, or the simulated experience of a launch, but without performing an actual launch; and
(2) a resupply services contract to deliver payload to earth orbit, provided that the launch site of the payload is an airport or spaceport in this state.
Section 2. This Act applies only to a report originally due on or after the effective date of this Act.
Section 3. This Act takes effect January 1, 2012.
*Note that the desire of this Zero-G, Zero Tax Act listed above is to realize the gains mentioned below sought by the Texas Space Alliance, as we founded the organization as a first step toward our long term goal to make Texas the premier Space State in America, and eventually the world. The language below was the original legislative language proposed to state legislative offices.
TAX EXEMPTIONS ON GAINS FOR SPACEFLIGHT ACTIVITIES IN TEXAS
(1) The following gains are exempted from taxation, beginning on the effective date of the Act:
* (i) Any gain recognized from the sale of launch services to space flight participants, or launch services intended to provide individuals the training or experience of a launch, without performing an actual launch. To qualify for this deduction, launch services must be performed in Texas or originate from a facility in Texas;
* (ii) Any gain recognized as a result of resupply services contracts for delivering payload, entered into with the Commercial Orbital Transportation Services division of the National Aeronautics and Space Administration or other space flight entity, when launched from an airport or spaceport in Texas;
* (iii) Any gain imposed on the gross receipts from the sale of, storage, use, or other consumption in this state of, property for use in space flight;
* (iv) Any gain from payloads or experiments used in or flown into space, or on products or product components produced or manufactured in a micro-gravity space environment.
SALES TAX EXEMPTIONS FOR SPACEFLIGHT ACTIVITIES IN TEXAS
(2) The following are exempted from sales taxes, beginning on effective date of the Act:
* (i) Machinery and equipment used by a spaceflight business;
* (ii) Property stored or consumed for space flight, including fuels for spaceflight vehicles;
* (iii) Payloads or experiments used in or flown into space;
* (iv) Products or product components produced or manufactured in a micro-gravity space environment;
* (v) Sales of tickets or payload fees for humans or commercial/experimental payloads;