California space flight property tax exemption extended

The sunset date for the space flight property tax exemption for qualified space flight property was extended to Jan. 1, 2029. This became effective Oct. 10, 2023. The exemption applies to all qualified space flight property through the 2029–2030 fiscal year unless this date is further extended by the legislature.

Under California Revenue and Taxation Code Section 242, property qualified for use in space flight is exempt from property tax. Space flight means any flight designed for suborbital, orbital, or interplanetary travel by a space vehicle, satellite, space facility, or space station of any kind.

For purposes of this property tax exemption, qualified property includes the following:

• Tangible personal property that has space flight capability, including an orbital space facility, space propulsion system, space vehicle, launch vehicle, satellite, or space station of any kind, and any component thereof
• Tangible personal property, including raw materials, work in process, or finished goods, that has, or will have upon manufacture, assembly, or installation, space flight capacity
• Fuel produced, sold, and exclusively used for space flight and of a quality that’s not adaptable for use in ordinary vehicles

The exemption won’t be denied by reason of failure, postponement, or cancellation of a launch of a space vehicle, satellite, space facility, or space station of any kind, or the destruction of any launch vehicle or any component thereof, but the exemption won’t apply to any material not intended to be launched into space.

Taxpayers must provide upon request of the assessor evidence that the qualified property has been or will be used as described above.

This property tax exemption is limited to taxpayers with a primary business purpose in space flight activities.