What This Bill Does
This bill changes federal tax rules to give special tax breaks for space launch businesses and equipment. Specifically, it allows companies to deduct the full cost of certain space vehicles, payloads and launch equipment from their taxes faster than normal rules allow.
Who It Affects
Companies that own or operate space transportation vehicles, payloads or equipment used to launch spacecraft from the United States.
Key Provisions
• Companies can deduct 100 percent of the cost of qualified space launch property in the year it is placed into use, instead of spreading deductions over several years (Sec. 2(b)(2)).
• This special tax treatment applies to space transportation vehicles or payloads launched from the United States, or equipment used to support U.S.-based space launches (Sec. 2(c)).
• Space vehicles launched from aircraft qualify for this tax break only if they are substantially made in America and launched from a plane that took off from U.S. soil (Sec. 2(c)).
• This tax advantage is available for property placed in service before January 1, 2033 (Sec. 2(c)).
What Changes
Companies can now immediately deduct the full cost of qualifying space launch property, giving them faster tax relief than current rules allow. This applies to equipment placed in service after December 31, 2023.
Important Definitions
"Qualified domestic space launch property" means space transportation vehicles, payloads, or other equipment placed into service before January 1, 2033, for launching spacecraft from the United States or its possessions (Sec. 2(c)).
Effective Date
December 31, 2023
II
118TH CONGRESS
1ST SESSION
S. 589
To amend the Internal Revenue Code of 1986 to provide bonus depreciation
for certain space launch expenditures, and for other purposes.
IN THE SENATE OF THE UNITED STATES
MARCH 1, 2023
Mr. RUBIO (for himself, Mr. SCOTT of Florida, Mrs. FEINSTEIN, Mr. WICKER,
and Mr. CRUZ) introduced the following bill; which was read twice and
referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to provide
bonus depreciation for certain space launch expenditures,
and for other purposes.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘American Space Com-
4
merce Act of 2023’’.
5
SEC. 2. SPECIAL ALLOWANCE FOR QUALIFIED DOMESTIC
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SPACE LAUNCH PROPERTY.
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(a) ALLOWANCE
OF BONUS DEPRECIATION
FOR
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QUALIFIED DOMESTIC SPACE LAUNCH PROPERTY.—Sec-
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•S 589 IS
tion 168(k)(2)(A)(i) of the Internal Revenue Code of 1986
1
is amended—
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(1) by striking ‘‘or’’ at the end of subclause
3
(III),
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(2) by striking ‘‘or’’ at the end of subclause
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(IV),
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(3) by adding ‘‘or’’ at the end of subclause (V),
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and
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(4) by adding at the end the following new sub-
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clause:
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‘‘(VI) which is qualified domestic
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space launch property (as defined in
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paragraph (11)),’’.
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(b) EXTENSION OF TERMINATION OF BONUS DEPRE-
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CIATION
FOR QUALIFIED DOMESTIC SPACE LAUNCH
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PROPERTY.—
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(1) IN GENERAL.—Section 168(k)(2)(A)(iii) of
17
the Internal Revenue Code of 1986 is amended by
18
inserting ‘‘(in the case of qualified domestic space
19
launch property, before January 1, 2033)’’ after
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‘‘before January 1, 2027’’.
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(2) APPLICATION
OF
APPLICABLE
PERCENT-
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AGE.—Section 168(k)(6) of such Code is amended
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by adding at the end the following new subpara-
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graph:
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•S 589 IS
‘‘(D) RULE
FOR
QUALIFIED
DOMESTIC
1
SPACE
LAUNCH
PROPERTY.—Notwithstanding
2
any other provisions of this paragraph, in the
3
case of any qualified property which is qualified
4
domestic space launch property, the term ‘appli-
5
cable percentage’ means, in the case of property
6
placed in service after December 31, 2023, and
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before January 1, 2033, 100 percent.’’.
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(c) QUALIFIED DOMESTIC SPACE LAUNCH PROP-
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ERTY DEFINED.—Section 168(k) of the Internal Revenue
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Code of 1986 is amended by adding at the end the fol-
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lowing new paragraph:
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‘‘(11) QUALIFIED
DOMESTIC
SPACE
LAUNCH
13
PROPERTY
DEFINED.—For purposes of this sub-
14
section—
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‘‘(A) IN
GENERAL.—The term ‘qualified
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domestic space launch property’ means property
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placed in service before January 1, 2033, that
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is—
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‘‘(i) a space transportation vehicle or
20
payload (as such terms are defined in sec-
21
tion 50101 of title 51, United States Code)
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that is launched from the United States, or
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‘‘(ii) other property or equipment
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placed in service for the purpose of facili-
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•S 589 IS
tating a space launch from the United
1
States.
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‘‘(B) SPECIAL RULE FOR SPACE LAUNCHES
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FROM AIRCRAFT.—A space transportation vehi-
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cle or payload that is launched from an aircraft
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shall be considered to be launched from the
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United States if, and only if, such space trans-
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portation vehicle or payload is—
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‘‘(i) substantially manufactured within
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the United States, as determined by the
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Secretary, and
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‘‘(ii) launched from an aircraft on a
12
flight that originated from United States
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soil.
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‘‘(C) UNITED STATES.—The term ‘United
15
States’ includes the possessions of the United
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States.’’.
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(d) EFFECTIVE DATE.—The amendments made by
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this section shall apply to property placed in service after
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December 31, 2023.
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Æ
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