Talk about expanding the definition of taxable property. Los Angeles County Assessor Rick Auerbach wanted to tax eight satellites that hover 22,000 miles over the earth. Auerbach came across the satellites during a routine audit of Hughes Electronics. He figured they were fair game, since they were owned by a business based in the county and no other jurisdiction was taxing them.
The California State Board of Equalization, however, decided to extend the doctrine of "no taxation without representation" into outer space. It blocked Auerbach's proposal.
Not that Auerbach's idea was totally pie-in-the-sky. In researching the issue, Auerbach noted a precedent in which a court allowed his office to tax property belonging to the Ice Capades, even though the skaters spend most of their time outside of Los Angeles County. The county attorney's office agreed with Auerbach's reasoning, as did staff with the Board of Equalization, which oversees collection of California's sales and use taxes.
State Treasurer Kathleen Connell, however, who sits on the board, convinced a majority of its members "that there should be language adopted in the tax code, that satellites in outer space have no tax status in California," according to a board spokesman. The board will hold a public hearing on the matter this month, with final language expected about a month later. Auerbach is not expected to challenge the final rule.
"The county can't provide any services to these satellites," conceded an Auerbach assistant. "They're not even over California."