Satellites orbiting thousands of kilometres above Earth can be classified as movable personal property and therefore be subject to property tax, say Los Angeles county officials.
Hughes Electronics, based in El Segundo, owns satellites each worth up to $100 million. A routine audit of the company鈥檚 property by county assessors sparked the taxation idea, according to the Los Angeles Times.
Local lawyers have advised the assessors that taxing these satellites as 鈥渕ovable personal property鈥�, in the same category as boats, construction equipment and even ice skating costumes, would be legal.
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鈥淚t happens with lots of other property. The difference with the satellites, obviously, is that they鈥檙e pretty far removed from Earth,鈥� said Los Angeles County Assessor Rick Auerbach.
But Hughes鈥檚 lawyers are arguing that since the satellites are geostationary, they are not strictly 鈥渕ovable鈥�.
鈥淕eostationary objects sit above the equator in a fixed position; they do not rotate around the Earth. So the satellites we鈥檙e talking about here are not movable property,鈥� said Larry Hoenig, who is representing Hughes Electronics.
Auerbach is currently focusing on eight satellites owned by the company between 1991 and 1994. But if the taxation is eventually allowed, it would apply to all satellites owned by companies based in California.
Both Auberbach and the satellite company鈥檚 lawyers say they think the case will end up in the courts.