$450K Virgin Galactic Tickets To Space May Also Get Taxed in New Mexico

Virgin Galactic Branson, Truth or Consequences, United States - 11 Jul 2021
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Legislation often needs to change with the times — and that includes state tax rules.

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When New Mexico legislators passed a ruling in 2019 that excluded receipts “from launching, operating or recovering space vehicles or payloads in New Mexico” from gross receipts taxes, they were thinking largely of cargo — scientific equipment, technology, satellites and potentially even plants or animals. Under the ruling, since it wasn’t specified, human passengers are also considered “freight,” and not subject to gross receipts taxes.

But that could change with an amendment to the statute, which would tax passengers on Virgin Galactic’s $450,000 sub-orbital flights, which travel 360,000 feet above earth.

The tax, according to ABC News reports, could be at least $31,000, putting the total cost of a flight from Spaceport America up above $480,000. Considering the cost of the flight — and the unusual value it delivers — it’s unlikely the added tax would deter Virgin’s high net worth passengers. Yet, it would bring in hundreds of thousands of dollars to local communities and the state of New Mexico.

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“When those exemptions were drafted, it was not in anyone’s mind that people would be a payload,” Republican Rep. Jason Harper of Rio Rancho told ABC News. Harper, along with Democratic Rep Matthew McQueen, is sponsoring the bill.

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“I can’t think of a particularly good reason why we wouldn’t tax this activity,” McQueen told ABC News.

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About the Author

Dawn Allcot is a full-time freelance writer and content marketing specialist who geeks out about finance, e-commerce, technology, and real estate. Her lengthy list of publishing credits include Bankrate, Lending Tree, and Chase Bank. She is the founder and owner of GeekTravelGuide.net, a travel, technology, and entertainment website. She lives on Long Island, New York, with a veritable menagerie that includes 2 cats, a rambunctious kitten, and three lizards of varying sizes and personalities – plus her two kids and husband. Find her on Twitter, @DawnAllcot.
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