How to Get Tax Breaks by Doing Things in Space

Illustration for article titled How to Get Tax Breaks by Doing Things in Space

If you're a financial procrastinator living in the US, chances are that you're hurriedly working on your taxes in anticipation of the April 17th filing deadline. Wouldn't it be great if you could choose to support spaceflight with some of that hard-earned cash? You can't earmark your taxes for NASA, but there are a few ways that you can support space technology while earning yourself some tax breaks in the process.

Please don't take any of this as legal advice. You should speak with a qualified tax expert before making any investments or donations — or hightailing it to the Isle of Man.

Run a space transportation company in Virginia or Florida. The Mid-Atlantic Regional Spaceport (MARS) is a commercial launch facility located on the Eastern shore of Virginia. In an effort to draw business to MARS, Virginia enacted the "Zero-G, Zero tax Act of 2008," which provides tax exemptions for income earned from the sale of training for spaceflight participants, launch services, or from delivery payloads for NASA's Commercial Orbital Transportation Services. Similarly, Florida offers sales and use tax exemptions for Florida companies that operate out of Spaceport Florida.


Run any space-related business from the Isle of Man. But if you want a bone fide spaceflight tax haven, move your space business to the British Crown Dependency the Isle of Man. In 2004, the Manx Treasury Minister announced a zero rate of corporate tax to businesses involved in the space and satellite industry. The Isle of Man has done the same for the shipping, insurance, and fund management industries, and the space industry there has boomed thanks to this tax provision. Just this year, space industry consultancy firm Ascend ranked the Isle of Man the fifth most likely nation to put the next person on the moon.

Invest in astronomy research in Hawaii — before 2010. Hawaii's Act 221 provided a 100% tax credit for investment in qualified high-tech businesses, including research and development work, computer software development, biotechnology, sensor and optic technologies, ocean sciences, astronomy, and non fossil fuel energy-related technology, as long as more than 50% of the business's activities constituted "qualified research" and 75% of that research was conducted in Hawaii. Sadly, the state Senate voted to end this credit in 2010, making the prospect of buying telescopes in Maui a bit less attractive.

Have employees as a spaceflight contractor in Florida. Thanks to Florida's Qualified Defense and Space Contractor Tax Refund, contractors working in defense and spaceflight can receive tax refunds for creating and retaining jobs — $3,000 per full-time job retained or created, and $6,000 in an Enterprise Zone. Contractors can receive even greater tax credits for offering their employees more competitive salaries.

Buy a raffle ticket for a trip to space — for charity. Newt Gingrich actually proposed holding raffles to help fund his moon base, offering up to a $50 credit for tax payers who purchase tickets in hopes of winning a trip to space. Even though you can't buy tickets to Gingrich's lunar colony, you can buy a raffle ticket for a suborbital vacation from, for example, Trans Lunar Research, which is a qualified tax-exempt nonprofit. Just remember, if you win the grand prize, you have to report that as income to the IRS.


Make a donation to an eligible non-profit that supports spaceflight. You don't have a buy a raffle ticket, you can make a donation to any nonprofit organization in the US — as long as it's a tax-exempt organization under section 501(c)(3) of the Internal Revenue Code. As long as you don't receive anything in return, you can write it off as a deductible donation. (If you do receive something, you have to pay taxes on the fair market value of whatever you receive in exchange for your donation.) Organizations like the Manned Space Flight Education Foundation and the Planetary Society are qualified nonprofits that let you fund spaceflight research and education while taking a nice tax write-off.

Have your ashes shot into space. This one isn't on the books yet, but a proposed Virginia law would offer a tax credit to residents who have a portion of their cremated ashes shot into space. If the act passes, Virginia residents who want to commingle their dust with stardust could earn an $8,000 tax credit. So you get to go to space (even if posthumously), support the spaceflight industry, and get a little money back from the government? Sounds like a win-win-win.


Original of top photo by Ken Teegardin, Photo altered under a Creative Commons Attribution Share Alike License.


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Chip Overclock®

On a related note, I would encourage folks to be pro-active about their charitable giving. Don't give just because some charity sends you something in the mail. Charities send bazillions of those mailings out, doesn't mean you're special. Give because the charity represents values that you in which you actually believe. Search for them and contact them if they haven't contacted you; they'll be delighted to take your money. No matter what your cause, it's likely you'll find someone representing a pool of like minded individuals. My preferred charity is my alma mater, because I attribute much of my good fortune to my education, and specifically my mentor and thesis advisor. But your mileage will vary.