FAA: no current plans to tax commercial space launches

COLORADO SPRINGS — A Federal Aviation Administration official said April 10 that the Biden administration has no plans for the time being to levy taxes on commercial launches, similar to those on airlines, to address the launch industry’s impact on airspace.

The New York Times reported April 4 that the Biden administration was proposing to tax companies that perform commercial launches, modeling the tax on those the Department of Transportation charges on commercial airline tickets that go into a trust fund that supports airport infrastructure and airspace operations. The article suggested that launch companies were getting a “tax-free ride” by not funding the FAA’s air traffic management work even as launches impose temporary airspace closures that affect aviation.

However, Kelvin Coleman, FAA associate administrator for commercial space transportation, told reporters at the 39th Space Symposium that there are no current plans to seek a tax on commercial launches.

“The president’s budget request does not include a tax proposal,” he said.

He noted there had been conversations about ensuring the air traffic control system had adequate resources to deal with a growing volume of traffic, both aviation and spaceflight. Those discussions included the possibility of taxes on commercial launches and reentries as one mechanism for raising money, but that had not yet advanced to a formal proposal.

“At this point, there is no concrete proposal in the president’s budget request. There are conversations, there’s things we talked about, but I think there’s still a ways to go before we see something concrete in that regard,” he concluded.

The commercial launch industry privately reacted to the report about the tax proposal with surprise and dismay. They were also concerned about how the article portrayed the effects of commercial launches on the National Airspace System, with one former air traffic controller comparing the airspace closures for launches to “a hurricane making landfall.”

Coleman said the relationship with the FAA’s Air Traffic Organization has been positive. He said was “pleasantly surprised” by the level of cooperation with between the aviation and launch sectors at a meeting last year facilitated by the FAA in Florida, which experiences the most launch-related airspace closures.

“There’s obviously been growing concerns about do we better integrate commercial launch activities into the National Airspace System,” he said. “I’ll give credit to the Air Traffic Organization at the FAA. They’ve done a great job of coming up with dynamic airspace procedures that allow us to be less conservative in the allocation of airspace.”

He acknowledged, though, worries about the growing frequency of launch and its impacts on airspace. “Are there still some points to be worked out? Absolutely,” he said.

Preparing for next Starship launch

Coleman’s office has also been busy with SpaceX’s Starship, which performed its third integrated test flight March 14. SpaceX executives, including Chief Executive Elon Musk, said the company will be ready to conduct its next launch as soon as early May. That will require the FAA to approve SpaceX’s mishap review and update the launch license.

Coleman stopped short of endorsing that timeline at the briefing. “I think we can possibly get there. I’m not going to say we will get there absolutely in May, but I won’t say it’s out of the question, either.”

The launch license, he said, will require modifications because the next flight will fly a different profile. “They’re going to do some different things with this particular mission,” he said, deferring to SpaceX to provide details about those changes. SpaceX has not discussed its plans for the upcoming flight in detail, although Musk said last week they will attempt a landing of the Super Heavy booster on a “virtual tower” in the Gulf of Mexico as a precursor to landing the booster back at the Starbase launch site on a later launch.

Coleman said the FAA may be able to first complete a public safety determination, finding that there were no flaws in critical safety systems on the March launch that would have endangered the safety of the uninvolved public. If so, “that would decouple the mishap investigation from the license modification, and that means that we could get the license modification done while the mishap investigation is ongoing.”

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