Home New mexico tax Wealthy space tourists don’t need our charity

Wealthy space tourists don’t need our charity

0

Comment: Since the day in 2005 when the deal between Bill Richardson and Richard Branson for what would become Spaceport America was first announced, Southern New Mexico’s business model has always been to separate wealthy tourists from their hard-earned steps. holiday money.

“…First flights of a suborbital spacecraft (are) now expected in late 2008, early 2009,” Virgin Galactic announced in a 2005 press release, the first of what would be many overly optimistic projections.

As editor of the Sun-News op-ed page at the time, I supported the spaceport, even though I understood it to be a glorified playground for the super-rich. That support continued through the lean years after the fatal 2014 test flight, not because of my love for the super-rich. But I saw, and still see, the economic potential of bringing a whole bunch of them into town on vacation.

All of this makes the decision of the New Mexico legislature not to tax the millionaires and billionaires who I hope will one day be launched from Spaceport America so perplexing…and so insulting to the people of Dona Ana and de Sierra who continue to pay an increase in our gross receipts taxes for the construction of a facility that was completed years ago.

A 2019 change to state tax rules reclassified space tourists to the “payload” category, which is exempt from gross receipts tax under a bill designed specifically for the spaceport. , and not for passengers, who are not exempt.

And so, while New Mexico residents pay gross receipts taxes on all necessities, foreign billionaires who explode in space don’t pay the tax. It has to be the most regressive policy in the entire state tax code.

A bill that would have closed the loophole was tabled in the House Commerce and Economic Development Committee last week, based on arguments that the state made a promise to Virgin Galactic from the start. and must now fulfill this commitment.

Virgin Galactic executive Sirisha Bandla told House committee members that the loophole passed in 2019 was anticipated 14 years earlier when the original deal was struck.

If that’s true, why wasn’t it clearly spelled out in the original contract? Between Virgin Galactic and the state of New Mexico, it’s hard to imagine how many attorneys and how many billable hours went into drafting it. Have they all forgotten? Why the need for a legal sleight of hand now, pretending that people are no different from the scientific experiments hidden in the cone of the nose?

Opponents of the bill have also argued that taxing the wealthy would stifle an industry that is still in its infancy.

This would be a good time to note that the price of a ticket has gone from $200,000 in 2005 to $450,000 today. This, despite the fact that Virgin Galactic has yet to prove it can deliver on its promise of safe, routine launches.

The idea that levying a tax on gross receipts will somehow deter those who are willing and able to pay $450,000 per ticket, or spoil what will be a once-in-a-lifetime experience , is absurd.

New Mexico taxpayers spent some $225 million to build the spaceport and continue to spend $4 million a year on maintenance and operations, according to the bill’s sponsor, Rep. Jason Harper. It’s time we started seeing a return on that investment.

Walter Rubel can be contacted at waltrubel.com.