- President Biden has flagged commercial space launch companies like SpaceX for aviation excise taxes.
- The firms currently do not pay the tax, which is tagged to the price of airline tickets.
President Joe Biden wants private space companies, such as Elon Musk's SpaceX and Jeff Bezos' Blue Origin, to start paying taxes to use US airspace.
His budget proposal, released last month, suggests rewriting the decades-old aviation excise tax structure so private space companies pay a share, according to The New York Times.
"Whenever SpaceX launches a flight, it requires massive air traffic control resources to clear the airspace for hours around the launch window," David Grizzle, a former chief operating officer of the Air Traffic Organization, an agency within the FAA that hires the controllers, told The Times.
"And again, it pays zero," he said.
The aviation excise taxes go to the Airport and Airway Trust Fund which finances the Federal Aviation Agency (FAA), per The Times.
The fund's coffers are currently mostly filled by commercial airlines, which are charged 7.5% on each ticket price — or about $5 to $20 per passenger.
Space launches still represent a small proportion of the commercial airspace — about 10% in 2023 — but they are expected to grow substantially, the US Government Accountability Office (GAO) said in a report published in February.
The FAA is already struggling to keep up with the pace of launches, which has been growing year on year.
In 2023, the agency fielded 124 commercial space launches and re-entry events, per the GAO. That's up about 48% from 84 launch and re-entry events in 2022, and 106% from 60 in 2021.
The agency in February called for a 36% increase in the budget of its commercial space office.
"We've seen increased demand for our services over the last few years," Kelvin Coleman, FAA associate administrator for commercial space transportation, said on a media roundtable in February, per spacenews.com.
"Right now we're at about 140 people and they're all pedaling as fast as they can," said Coleman.
SpaceX dominates the US commercial space sector, accounting for almost half of all licensed launches in the US between 1989 and August 2023, per the FAA.
The company has already launched more than 30 rockets in 2024, having broken its own record by launching 96 rockets in 2023.
Still, commercial partners say Biden's move could be premature. Many space exploration firms are in a fragile early state where they are struggling to break even, and spaceflight takes up a small amount of time in the airspace — about 15 seconds per flight — compared to sectors handled by the FAA, per The Times.
Taxing the industry is "not appropriate at this time," said Karina Drees, president of the Commercial Spaceflight Federation, per The Times.
Biden's call comes as part of an overhaul of the aviation excise tax structure, fueled in part by an independent safety review report published by the FAA last year, according to The Times.
The US President last month also called for private and corporate jet owners to increase their contributions, as part of his push for the wealthy and big corporations to pay "their fair share."
His proposal would increase the tax on fuel to $1.06 per gallon over five years, up from 21.8 cents, per The Times.
SpaceX and Blue Origin did not immediately reply to a request for comment