Fla. Sen. Nelson wants tax breaks for investments in commercial rocket industry

Nelson wants tax breaks for space industry

ORLANDO, Fla. — U.S. Sen. Bill Nelson wants to create five business enterprise zones around the country, including one possibly at the Kennedy Space Center, where investors who put their money in commercial space ventures would get major tax breaks.

The Florida Democrat will produce legislation Tuesday that would give tax breaks worth 20 percent of their outlays to investors in private space-related businesses. The Commercial Space Jobs and Investment Act would help attract engineers and scientists to these enterprise zones and create jobs in a space industry facing uncertainty, Nelson said.

“What we’re doing now is everything we can to ensure KSC’s continued importance to our nation’s space exploration effort, while also broadening the economic opportunities along our Space Coast,” Nelson said in a statement.

The U.S. space program is undergoing its biggest transformation in a generation with the last space shuttle flight scheduled for next year. Thousands of workers are expected to lose their jobs when the shuttle program ends.

The Obama administration has pledged $40 million to Florida’s Space Coast to help ease the transition. Another $60 million has been proposed for other regions around the nation affected by the end of the program.

Nelson’s bill would amend the 1986 tax code to give investors a credit worth 20 percent of their investment in businesses that create launch vehicles, re-entry vehicles, related equipment or are part of those operations. The investment would have to be for no less than five years.

The bill also would raise a tax credit for research and development in these zones from 20 percent to 30 percent if it is conducted on space-related tests in those enterprise zones.

States vying to get the enterprise zones would have to show they have been impacted by the loss of space jobs and already have space-related infrastructure in place. The zones would be chosen by the U.S. Commerce Secretary, said Bryan Gulley, Nelson’s press secretary.

“You couldn’t do it in Iowa, or you couldn’t do it where there is no space industry and no high unemployment,” Gulley said. “Clearly, it’s intended to help communities where there already has been an established space industry, and communities where NASA already has a presence.”