Tourism Tax May Follow People into Outer Space

Aug 25, 2021 | Blog, Uncategorized

According to CNN Business, going back into outer space is a short-term goal for Jeff Bezos. However, a substantial tax for the privilege may be on the horizon. Oregon Representative Earl Blumenauer (D) wants to tax space tourists, particularly the richest man on Earth. Of course, this is a fairly new subject, but consulting a tax attorney in San Francisco may be necessary for rocket company owners in the future.

The space-tourist tax was introduced by Blumenauer, who represents Portland as well as some of its suburbs. His announcement came the same day Jeff and Mark Bezos, along with two other passengers, took a short rocket trip into the outskirts of the zone considered “outer space.”

Rocket Companies Compete for Business

Jeff Bezos owns a rocket company called Blue Origin, and, following the flight, he stated that the company has taken in approximately $100 million for spaceflight reservations, although the flights have not yet been scheduled. Virgin Galactic, one of Blue Origin’s competitors, has sold 600 tickets to consumers planning to take spaceflights as a leisure activity. Virgin Galactic’s tickets fetch up to $250,000 each. Virgin Galactic took billionaire Richard Branson, who is the company’s controlling shareholder, on an outer spaceflight last week.

Additional plans for tourism flights are in the works at SpaceX, which is Elon Musk’s rocket company. The latter is also contracted by NASA to deliver United States astronauts and supplies to the International Space Station. Musk’s company has future plans for orbit flights around the Moon and the Earth, but ticket prices have not yet been made public. Some tax lawyers believe they will be priced in the millions. It is not yet known if cryptocurrency will be accepted as a method of payment for such tickets.

Richard Branson Space Tax

Congressman Blumenauer Plans to Focus on Space-Tourism Tax

Blumenauer told CNN Business that he believes space tourism may become very significant in the leisure industry, and that such businesses should be taxed. The congressman referred to families paying taxes and other charges on airline tickets when vacationing, and he mentioned the 9.5 percent ticket tax for Legoland to make his point.

He did not, however, mention a rate for the proposed tax, or where the money would go once collected. Rather, he stated that he merely wanted to get the conversation going, since recent space-tourism flights have opened the subject.  Blumenauer indicated that he believed it was a topic that’s essential to “get ahead of.”

NASA spaceflights for the purpose of scientific research would be exempt from the tax that the congressman is proposing. He added that US space programs paid for by tax-paying citizens have helped space-tourism businesses in the private sector, which he cites as another reason for the space tax.

Blumenauer claimed the tax would not be huge or burdensome, and that, whatever it is, those who can afford to pay for spaceflights for personal entertainment will undoubtedly be able to afford the tax. Indeed, only the super wealthy or those with access to hefty trust funds or other sources of income can afford this type of amusement.

After announcing his plans for the bill, Blumenauer stated that when space innovation technology is used purely for entertainment or tourism, the business behind it should support the good of the public in return, and this can be accomplished by taxing such companies. Blue Origin, Virgin Galactic, and SpaceX have not responded to requests for comments on the bill. However, they may have to do additional tax planning if the bill is voted into law. Consulting a tax attorney is the best course of action for rocket company owners or anyone with questions about tourism tax.