NM’s Latest Plan to Make Money From Spaceport America: Stop Treating SpaceShipTwo Passengers as Freight

SpaceShipTwo Unity on its second glide flight over Spaceport America. (Credit: Virgin Galactic)

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).

CountyTicket PriceGross Receipts TaxTotal TaxTotal Cost
Dona Ana County$450,0008.3125$37,406.25$487,405.25
Sierra County$450,0006.9375$31,218.75481,218.75

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.

NASA Seeks Suborbital Space Companies to Flight Test Space Technologies

Current commercial suborbital spaces launch providers that are under contract for the Flight Opportunities Program. (Credit: NASA Collage / Monroe Conner)
Current commercial suborbital spaces launch providers that are under contract for the Flight Opportunities Program. (Credit: NASA Collage / Monroe Conner)

EDWARDS, Calif. (NASA PR) — NASA has been working with commercial space companies for several years to deliver astronauts and supplies to the International Space Station. The agency has also sought commercial suborbital space companies to verify the performance of technologies and systems in suborbital space with the goal of reducing the cost and risk of future orbital space missions.

NASA’s Space Technology Mission Directorate’s Flight Opportunities Program has re-opened its solicitation seeking to on-ramp suborbital reusable launch vehicle services that will fly NASA internally sourced or NASA-directed research and development technology payloads.  The suborbital flights will provide these payloads exposure to space, reduced gravity or high-altitude environments required to test technology performance and advance technology readiness levels.

NASA awarded the first on-ramp solicitation to Near Space Corporation, Tillamook, Oregon, in September 2015, that joined original vendors Masten Space Systems, Mojave, California; UP Aerospace, Littleton, Colorado; Virgin Galactic, New York City; and World View, Tucson, Arizona, in providing flight services using suborbital launchers and balloons.

The on-ramping solicitation allows for additional suborbital space companies with a proven flight record to qualify as new flight providers for the program. Aircraft microgravity flight services are outside the scope of this solicitation.