Tax Policy: Historical Tax Treatment of INTELSAT and Current Tax Rules for Satellite Corporations

The International Telecommunications Satellite Organization (INTELSAT)--an intergovernmental organization launched in 1964 to design, develop, and operate a commercial telecommunications satellite system--enjoyed certain privileges that domestic companies do not, including some related to taxation. Each member nation designated a Signatory to participate as an investor. The U.S. Signatory was COMSAT, a private corporation. Intelsat privatized in 2001, and its tax situation changed. In response to congressional requests for information on whether Intelsat could continue to enjoy any preferential tax treatment as a foreign corporation, GAO did this study to describe how INTELSAT and COMSAT were treated for U.S. tax purposes prior to INTELSAT'S privatization and to describe how current U.S. tax treatment for a domestically incorporated satellite company in the United States compares to current U.S. tax treatment for a foreign corporation with operations, services, and revenue in the United States.