Who Will Collect Income Tax in Space?

With all those big corporations literally on the doorstep of space exploitation, what with all the spaceports getting licenses, planned passenger flights, even the hotel that Bigelow Aerospace just launched and is testing the first inflatable room module as I type this, not to mention planned bases on the moon, who will have jurisdiction to collect income tax?

Pizza Hut, Lego and Radio Shack are already running advertizing on Russian launch vehicles and on the international space station...

Lego Mars Toys On ISS

Bill Boards in Space

Full Story

The FAA already has in place an office to handle all this space traffic... and I bet other government agencies are already prepping to get there fingers into the pie..


FAA Issues Oklahoma Launch Site Operator License June 12, 2006

FAA Office of Commercial Space Transportation

But the IRS is going to have a tough time taxing the profits "out there" . I suppose for the moon we will just "take" the land we need...[provided there is no one there like some in here believe] [not that that ever stopped us before] But would we not need to declare it a state or territory before we can legal collect tax? And would the minimum population requirements for statehood apply, or would we make "special consideration" like they did for Nevada?

I can bet the corporations have their lawters working on that... I mean Russians are selling tickets for 20 million a pop [4 sold already] and Virgin Galactic is talking 200 thousand per trip. I have no numbers for the companies doing advertising. Now I suppose technically these amounts are collected "on the ground" so local tax law would apply... but its only a matter of time before you can buy that pizza in space...

First chain pizza out of the gravity well

Passenger Space Fight as early as 2008

Virgin Galactic

Only Las Vegas would think of Hotels in Space. Imaging the tax free gambling revenues. Now THAT would fund the program!

Bigelow Aerospace



[edit on 19-7-2006 by zorgon]

Most likely just like on the oceans it would come to whose sovereign territory you’re on. American warships, for example, are considered sovereign territory of the US though they are in international waters. A private hotel in space would most likely be treated the same as a private cruise ship in international waters.

I absolutely agree with the above poster. No one will be able to collect any form of tax in space as there are no countries in space!

There are regulations against staking land claims in space and on the moon IIRC.

In fact it is absurd to even suggest charging income tax in space (assuming there was some way of getting an income in space!) as it would have to be split into "space countries". A satellite could then orbit at a speed faster than the earth and would then jsut become a "tourist" between these hypothetical space countries regularly passing over the borders. It also raises the question of how far into space would these space countries extend into the universe? Is the british government missing out because aliens in a far galaxy arent charging VAT?

I think you should have to stay above your own country thought because what happens if china or india or iran puts a missle right above new york city and sends it straits down by the time we know whats happening it will be over.

I think you should have to stay above your own country thought because what happens if china or india or iran puts a missle right above new york city and sends it straits down by the time we know whats happening it will be over.

Originally posted by losangeleslover
I think you should have to stay above your own country thought

Never thought about that... with all these countries out there in space, you mean we will have to enforce geosynchronos orbits? Get permissions for flight paths to get into orbit? Then what space border patrols?

Lets stick to tax for now Easier to think about

Yeah, but the hardest part will be having to dig your passport out of the pocket on your spacesuit when doing a spacewalk from one floating casino to another.

JDub

Originally posted by gfad
I absolutely agree with the above poster. No one will be able to collect any form of tax in space as there are no countries in space!

Ah, but the Tax Man is far more clever than you give him credit for!

I work for the California state tax agency, here in the U.S., and I can assure you that we have got the issue of Extra-terrestrial Taxation already covered!

It is really quite simple you see; you merely tax the corporate profits in the State or Provence of the corporation's origin or operation!

For example, here in California, every general corporation is already subject to an 8.84% tax on all income (subject to apportionment factors). If a corporation registered in California were to generate income from extra-terrestrial sources, that income would be automatically subject to the State's taxation regulations.

In fact, I can easily envision legislation which would declare that any income derived by a corporation operating in California from a source or sources, not otherwise encumbered by another taxing jurisdiction (such as from non-terrestrial operations), would be required to remit taxes based on said income to the State without apportionment or proration.

Scarey, ain't it?

But then the California Franchise Tax Board taught the Peoples Repulic of China how to collect taxes. They "harvest" human organs, I hear!

Quick studies, those Chinese...

I was going to post something similar to what Bhadhidar posted (I think; I can handle lots of big words, but legal/tax speak makes my eyes glaze over )

If I'm not mistaken, aren't lax tax laws a reason why a lot of companies incorporate in Nevada? Then it doesn't matter where they do business at; they abide by Nevada's tax laws for reporting income tax.

I would imagine the same would be said of any space faring business. They have to get registered as a business somewhere, and the laws that apply to terrestrial businesses in that state/nation/locale would apply to the business.

That'd be my guess though (which I'm interpreting to be roughly what Bhadhidar said.)

Also, you need to determine what exactly constitutes a space-based profit. If I see a Radio Shack ad on a Russian satellite, any profits gained by that company are going to come from me purchasing items on Earth. Any money that changes hands is going to change hands on Earth--even between Radio Shack and Russia's space agency. Still terrestrial business, just using extraterrestrial marketing.

Originally posted by Bhadhidar
Ah, but the Tax Man is far more clever than you give him credit for!

[And I thought they said the government wasn't snooping on us here

Yes I suppose point of origin makes sense. Afterall there are no space banks yet. Just like the ships at sea mentioned by the other poster.

Scarey, ain't it?

Yes scarier than an alien invasion. No escape from the tax man even if you get off the planet. Does your office have anyone training for off world enforcement? I mean what a place to hide the books,

But then the California Franchise Tax Board taught the Peoples Repulic of China how to collect taxes. They "harvest" human organs, I hear!
Quick studies, those Chinese...

Thats interesting.[The teaching] Well the chineese are not encumbered by religious beliefs and squabbles like we are here. [Bush just Vetoed stem cell research], but harvesting organs to pay your taxes?

Its interesting to note that the President of China's first stop on his last visit was Bill gates house. Bush got seconds... your right they learn quick

Thanks for posting, its always good to hear it from the "horses mouth" so to speak

Space Tax??

Hmmm...


The Galactic Federation??

lol

The sponsoring country would be my guess. *to get back on topic*

[edit on 7/19/2006 by Mechanic 32]

Originally posted by zorgon
No escape from the tax man even if you get off the planet. Does your office have anyone training for off world enforcement? I mean what a place to hide the books,

Thanks for posting, its always good to hear it from the "horses mouth" so to speak

Zorgon, this is California! We're the state that has elected an ACTOR to the highest office in the State, not once, but TWICE!!!

I mean, c'mon, how much MORE "off-world" can you get than "AhhNolt"?

And "enforcement"? Two Words, baby: The GOVERNATOR!


And thanks! People who know me ususlly refer to me as the Other End of the horse!

Well it might be a little while before there is a profit. Right now we can take conforn in the fact that it works both ways... all those HUGE expenses those companies will have as a write off. Tax man will have to bite the bullet for a few years.

But I guess they never go away... so can wait, and plan, and create new legislation to be ready. And I don't know many big corporations who take risks like space exploitation and NOT plan to make mega return on their investments.

But that brings to mind a little business opportunity... anyone want to chip in to start the first bank in space? I mean it can't fail... be a monoploy

First, taxes often go to things you actually need. Taxes pay for the infrastructure that you rarely ever see or pay attention to, take care of human undesirables, and fund global projects. That won't stop in space.

You WILL HAVE space criminals, the insane, the disabled, etc. These are all considered undesirable conditions (jail, mental institution, hospital, etc) and these are funded by taxes.

You WILL HAVE a water supply, power supply, air supply, waste disposal, etc. You must have these to survive and most people will not be able to provide these to themselves.

You WILL WANT new technology. This means research, which costs money. People are full of WANTS and willing to pay for them. That's what money is for... to spend on the things you want. Some projects are so BIG that a government basically has to govern it and regulate it, at least in the beginning. Sometimes governments do a good job, sometimes a bad job.


Secondly, if there are large groups of people living in space, space based defenses would be cheaper and more effective. Thus, you probably won't have to worry about missiles from one country to another... they'd never make it. However, you would have to worry about someone launching one right above you.

There is little doubt that space will be territorial. It is in our nature. Read a book on body language... you'll understand really quickly just how territorial we are.

Corporations like coca cola make billions and pay next to nothing in tax for a reason. Space based commerce will probably be taxed like the internet, so corps will locate in tax freindly Nations, and pump up the local economies.

California Franchise Tax Board... good people, i had a company in California before moving to China. Had many run ins, some my fault, some theirs, but they always treated me respectfully and sought a solution instead of just demanding payment, or paying interest when it was their fault.
good agency. ( China does not harvest organs btw....if you believe that then the bush family are reptilian leaders)

Originally posted by toolman
( China does not harvest organs btw....if you believe that then the bush family are reptilian leaders)

Now see how rumors get started? California Tax man gives us the goods on tax law, and casually mentions the organs...

As to bush and kin... you may be right... he just vetoed stem cell research today...

but hey thats another story

Taxes off world, as has been stated previously, would most likely be taxed both by the state of origin of the company, as well as country of origin for the company.

However, to put a hypothetical spin on things.....

Suppose an "international moon base" was established. Taxation federally would be more difficult. The coporations would still likely be taxed by country and state/province of origin, but also likely by the colony itself (unless, as I understand from previous posts, like the state of California, state taxation is not imposed upon those companies based in another taxable area). Individual taxation, though, would like be based on Sate/Province/Country tax rates for the first generation, but what about the second generation - those born on the moon? What about businesses established in the colony?

Also, what if the "international moon base" evolved more into its own entity (meaning a new country [based exclusively on borders and general unification of the populace], that would be based offworld, complete with its own tax structure? Would any of the residents or businesses there be subject to taxation by any earth-bound country (seeing as how they're residents of a new country/state, unaffiliated with anything on Earth)?

The more I think about this, the more I think I'm gonna write a movie. This could be GOOD.

Originally posted by obsidian468

The more I think about this, the more I think I'm gonna write a movie. This could be GOOD.

Hey I want my royalties... any lawyers in here

Originally posted by zorgon

Originally posted by obsidian468

The more I think about this, the more I think I'm gonna write a movie. This could be GOOD.

Hey I want my royalties... any lawyers in here

Royalties are taxable, too!

Seriously, though. The only way that I can see an extra-terrestrial concern escaping the bite of taxation would be if it were to be established and operated as a truly and wholly "off-planet" enterprise. It would have to exist completely severed from the "surly bounds" of planet earth and its greedy political divisions: an "international" entity established anywhere is merely an extension, by proxy, of an earth-born mess.

Interesting point. I could see that happening though once we get a big enough space station... say a little coffee shop affair for starters, a gift store for those Lego space souvenirs. But that brings in to question who would you pay business license fees to on an ISS [International Space Station] where several countries are footing the bill for construction and maintenance?

Actually I don't even know "who runs the show" with the current ISS