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Multistate Tax Update — March 31, 2016

Last March, the California Franchise Tax Board authorized its staff to hold interested party meetings to discuss the regulation of apportionment and allocation of income derived from space transportation activities. This includes the transportation of people or cargo into and from space.

Industry initiated the effort with a document titled Request to Proceed to Interested Parties Meeting for a Proposed Regulation under California Code of Regulations, Title 18, Section 25137, Relating to the Apportionment of Income Arising from Space Transportation Activities. Acknowledging that the current tax code does not address space transportation, the authors explained that “in the near future,” the private companies that now launch satellites into orbit and transport supplies to and from the International Space Station anticipate transporting people to and from space as well.