New Space Tax Breaks Model for Hyperloop

The Colorado Business Journal’s Ed Sealover reports that aerospace industries are pushing for more tax breaks. The aptly titled “Colorado spacecraft tax break gets stratospheric support” reports a bit of the lobbying effort by a couple of companies mainly spearheaded by the “Metro Denver Economic Development Corp”. Ed writes:

California, Florida and Texas all have similar tax breaks to HB 1178, sponsored by House Speaker Mark Ferrandino, D-Denver and House Minority Leader Brian DelGrosso, R-Loveland — and are ahead of Colorado in their ability to store satellites and attract aerospace companies, several people testified.

…legislators spanning the spectrum from liberal to conservative all got behind the attempt to boost an industry that has been targeted by state and Denver-area leaders.

However, The Denver Post’s Kristen Painter reports on a very interesting political landscape:

The national aerospace landscape is shifting dramatically as a result of a number of factors, including federal budget constraints, which the state’s aerospace cluster has relied on heavily.

Colorado — which has long rested on its educated workforce, academic and research institutions, high quality of life and relatively low cost of living — is at risk of losing its place of aerospace dominance.

The state punches above its weight, employing the third-most aerospace-related workers, behind California and Florida but ahead of Texas and Arizona. Colorado is the only top-five aerospace state without a sales-and-use-tax exemption.

Kristen brings up a very important point. The Aerospace industry is already heavily subsidized and historically funded via federal government. Lean startups like the Colorado Hyperloop can’t act like a Space corp because there isn’t enough money. Thats why SpaceX has to radically cut R&D and launch costs just to even be in business. The hyperloop will need to follow the lean SpaceX model.

So with a proven space industry, and competition from other states that are incentivising New Space, Colorado seemingly needs to get in the “game.”

The bill includes the tax exemption for anything “QUALIFIED PROPERTY FOR USE IN SPACE FLIGHT”… now imagine if everything that says “Space” below could be changed for “Hyperloop”. I wonder if it could still get support:

(I) A SPACE VEHICLE AND ANY COMPONENT THEREOF;
13 (II) TANGIBLE PERSONAL PROPERTY TO BE PLACED OR USED
14 ABOARD A SPACE VEHICLE, REGARDLESS OF WHETHER SUCH PERSONAL
15 PROPERTY IS TO BE ULTIMATELY RETURNED TO THE STATE FOR
16 SUBSEQUENT USE, STORAGE, OR OTHER CONSUMPTION; AND
17 (III) FUEL OF A QUALITY THAT IS NOT ADAPTABLE FOR USE IN AN
18 ORDINARY MOTOR VEHICLE AND THAT IS PRODUCED, SOLD, AND USED
19 EXCLUSIVELY FOR SPACE FLIGHT.
20 (b) “SPACE FLIGHT” MEANS ANY FLIGHT DESIGNED FOR
21 SUBORBITAL, ORBITAL, OR INTERPLANETARY TRAVEL BY A SPACE VEHICLE.
22 (c) “SPACE VEHICLE” MEANS ANY TANGIBLE PERSONAL PROPERTY
23 THAT HAS SPACE FLIGHT CAPABILITY AND IS INTENDED FOR SPACE FLIGHT
24 AND INCLUDES, BUT IS NOT LIMITED TO, AN ORBITAL SPACE FACILITY,
25 SPACE PROPULSION SYSTEM, SATELLITE, OR SPACE STATION OF ANY KIND.
26 (3) THE TAX EXEMPTION ESTABLISHED BY THIS SECTION MAY NOT
27 BE DENIED TO A TAXPAYER BECAUSE OF A FAILURE, POSTPONEMENT,
-3- HB14-11781 DESTRUCTION, OR CANCELLATION OF A LAUNCH OF A SPACE VEHICLE.

Wouldnt it be nice to have the lobbying firepower of something like this for the hyperloop?

The Hyperloop lobbying strategy should probably model off of this effort.

Also, it’s kinda ironic that the bill has the following:

SECTION 4. Safety clause. The general assembly hereby finds,
4 determines, and declares that this act is necessary for the immediate
5 preservation of the public peace, health, and safety.

Spaceflight is a very dangerous! Surely the Hyperloop is necessary for the preservation of public peace, health and safety too!

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