Tax Break a ‘Small Step’ for California’s Space Industry

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A bill passed by the California Legislature in April to provide a tax break to space companies is a “small step” for supporting the state’s aerospace industry, but one of many needed to keep the state competitive, an economist said May 15.

The bill, AB 777, exempts hardware and related items developed by space companies in the state, including launch vehicles and spacecraft, from local property taxes. The California Assembly and Senate passed the bill in April, and Gov. Jerry Brown (D) signed the bill into law April 29.

“It’s a small step in trying to make this area receptive to the aerospace industry,” said Robert Kleinhenz, chief economist with the Kyser Center for Economic Research of the Los Angeles County Economic Development Corp., in a presentation at the International Space Development Conference in Los Angeles. “It’s not going to turn things on a dime and lead to huge growth, but I do see this as one of many small steps needed to maintain our industry base here.”

The legislation had the support of a number of local officials, including Los Angeles Mayor Eric Garcetti (D). “This is a great step in keeping California at the forefront of space development,” he said in a keynote speech at the conference May 15.