Sky High Taxes

Jeff Taylor from the October 2001 issue

Good tax collectors find new things to tax. Los Angeles County Assessor Rick Auerbach may turn out to be taxman of the century if he succeeds in slapping property taxes on several satellites.

The eight birds orbiting the equator are worth $100 million each to Hughes Electronics, which happens to have offices in L.A. county. That's enough to make Hughes owe the jurisdiction a multi-million-dollar tax bill, Auerbach claims.

Auerbach counts satellites as taxable movable personal property -- like boats, construction equipment, and ice-skating costumes. For its part, Hughes says that geostationary birds are stationary -- hence, not movable -- and, it follows, not taxable.

The matter seems destined to end up in court. But don't bet against the tax guys. For years California had no compunction about reaching over state borders to tax the pensions of former California residents. Only an act of Congress stopped that.