Tax Type
Retail Sales and Use Tax
Description
Spaceport activities
Topic
Taxability of Persons and Transactions
Date Issued
12-10-1997
December 10, 1997
Re: Request for Ruling: Retail Sales and Use Tax
Virginia Commercial Space Flight Authority
Dear***********
This is in response to your letter of October 20, 1997, requesting guidelines pertaining to Code of Virginia § 58.1-609.3(13). This statute provides an exemption from the retail sales and use tax for purchases of tangible personal property related to the Virginia Commercial Space Flight Authority (the Authority). Specifically, your inquiry concerns an agreement between the Authority and the **************** for the creation of a commercial space port at Wallops Island, Virginia.
FACTS
The Authority and ***have entered into a long-term agreement for the creation of a commercial space port at the site of the Wallops Flight Facility in Wallops Island, Virginia. Pursuant to this agreement, ****and the Authority may enter into sub-agreements by which***provides facilities and services to the Authority. Commercial access to these **** facilities and services is then available through the Authority.
You also indicate that the Authority will be operating as a licensed launch site operator. Commercial entities will provide the actual launch services. Of concern to you is the scope and procedure for sponsoring activities that will benefit from the sales and use tax exemption.
RULING
The 1997 Virginia General Assembly enacted Code of Virginia § 58.1-609.3(13). This statute provides an exemption from the retail sales and use tax, as follows:
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- From July 1, 1997, through June 30, 2001, (i) the sale, lease, use, storage, consumption, or distribution of an orbital or suborbital space facility, space propulsion system, space vehicle, satellite, or space station of any kind possessing space flight capability, including the components thereof, irrespective of whether such facility, system, vehicle, satellite, or station is returned to this Commonwealth for subsequent use, storage or consumption in any manner when used to conduct spaceport activities; (ii) the sale, lease, use, storage, consumption or distribution of tangible personal property placed on or used aboard any orbital or suborbital space facility, space propulsion system, space vehicle, satellite or space station of any kind, irrespective of whether such tangible personal property is returned to this Commonwealth for subsequent use, storage or consumption in any manner when used to conduct spaceport activities; (iii) fuels of such quality not adapted for use in ordinary vehicles, being produced for, sold and exclusively used for space flight when used to conduct spaceport activities; (iv) the sale, lease, use, storage, consumption or distribution of machinery and equipment purchased, sold, leased, rented or used exclusively for spaceport activities and the sale of goods and services provided to operate and maintain launch facilities, launch equipment, payload processing facilities and payload processing equipment used to conduct spaceport activities.
For purposes of this subdivision, "spaceport activities" means activities directed or sponsored at a facility owned, leased, or operated by or on behalf of the Virginia Commercial Space Flight Authority.
The exemptions provided by this subdivision shall not be denied by reason of a failure, postponement or cancellation of a launch of any orbital or suborbital space facility, space propulsion system, space vehicle, satellite, or space station of any kind or the destruction of any launch vehicle or any components thereof.
- From July 1, 1997, through June 30, 2001, (i) the sale, lease, use, storage, consumption, or distribution of an orbital or suborbital space facility, space propulsion system, space vehicle, satellite, or space station of any kind possessing space flight capability, including the components thereof, irrespective of whether such facility, system, vehicle, satellite, or station is returned to this Commonwealth for subsequent use, storage or consumption in any manner when used to conduct spaceport activities; (ii) the sale, lease, use, storage, consumption or distribution of tangible personal property placed on or used aboard any orbital or suborbital space facility, space propulsion system, space vehicle, satellite or space station of any kind, irrespective of whether such tangible personal property is returned to this Commonwealth for subsequent use, storage or consumption in any manner when used to conduct spaceport activities; (iii) fuels of such quality not adapted for use in ordinary vehicles, being produced for, sold and exclusively used for space flight when used to conduct spaceport activities; (iv) the sale, lease, use, storage, consumption or distribution of machinery and equipment purchased, sold, leased, rented or used exclusively for spaceport activities and the sale of goods and services provided to operate and maintain launch facilities, launch equipment, payload processing facilities and payload processing equipment used to conduct spaceport activities.
The Authority's arrangement with****, whereby commercial access is available to **** facilities through the Authority, qualifies for the exemption. In this regard, the Wallops Flight Facility will be operated by or on behalf of the Authority. Commercial activities at this facility would therefor be "spaceport activities" as defined in the statute.
Exemption certificates
Exempt purchases may be made by providing vendors with a fully completed certificate of exemption. The Authority itself may use the governmental exemption certificate, Form ST-12. This is because the Authority was created as a political subdivision of the Commonwealth. Private contractors and other commercial entities cannot use the ST-12. Private contractors and other commercial entities that are eligible to make exempt purchases under Code of Virginia § 58.1-609.3(13) need to contact the department and request that an exemption certificate be prepared for them.
I have enclosed a copy of the Fiscal Impact Statement prepared for the House and Senate Finance Committees. This document was prepared by the department in response to the proposed legislation which culminated in the exemption for commercial space flight activities.
I understand that the Authority is in the early stages of promoting economic development at the Wallops Flight Facility. The department looks forward to working with the Authority and its commercial clients to address the application of the exemption to the transactions which the Authority anticipates.
I hope that this information is helpful. Please contact ***** in the department's Office of Tax Policy at***** if you have any questions regarding this letter.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/13092I
Rulings of the Tax Commissioner