California private-sector space flight companies will be eligible for a 10-year property tax break after Governor Jerry Brown signed new legislation into law. Assembly Bill 777 exempts qualified property used in space flight starting this year.
The reasoning behind the tax exemption is that expendable tangible personal property like space launch vehicles that can only be used once should not be taxed in the same fashion as machinery or equipment that is reused multiple times.
Al Muratsuchi, Chairman of the Assembly Select Committee on Aerospace and sponsor of AB 777 said the new law will help grow one of the most exciting new industries in California.
"Private companies like Space X are building rocket ships and creating thousands of good-paying manufacturing jobs right here in Southern California. This new law will allow commercial spaceflight companies to continue to invest in our state," Muratsuchi said.