Nelson Seeks Tax Breaks for Commercial Rocket Investments Made in Five Zones

Florida Sen. Bill Nelson, D-Fla., has proposed a set of tax breaks to encourage investment in the commercial space industry as a way to cushion the blow from recent cutbacks in the space program in five of the qualifying states of Alabama, Arizona, California, Colorado, Florida, Louisiana, Mississippi, Texas, Utah and perhaps a few others.

Nelson’s bill, known as the Commercial Space Jobs and Investment Act of 2010, would amend the Tax Code to encourage investment in commercial space flight facilities and equipment, research and job training, and other purposes. However, the measure appears to do nothing for the Virginia commercial Mid-Atlantic Regional Spaceport and NASA Wallops Flight Facility, the potential commercial launch site competitor to Cape Canaveral.

The Nelson bill would create up to five regional business enterprise zones around the country as “magnets” for commercial space ventures, which in turn would attract jobs to areas where there are lots of scientists and engineers that may be impacted by a reduction in the NASA Constellation program.

Specifically, the bill would allow space-related businesses — situated around places like the Kennedy Space Center — to qualify for major tax breaks and other incentives. Investors would be able to write off 20 percent of their investments in commercial space companies that operate in the five regional business enterprise zones. Other provisions include a Commercial Space Research Credit of 30 percent and a special depreciation allowance for commercial space property equal to 50 percent of the adjusted basis of the qualified commercial space property.

Nelson may have a legislative strategy to include the tax measure provisions in the NASA Authorization Act of 2010, either as House floor amendment or in the House-Senate conference, with bipartisan votes from Florida, Alabama, Mississippi, Louisiana, Texas and Utah.