SpaceX, Elon Musk’s rocket and satellite internet company, has received billions of dollars in federal contracts over its more than two-decade existence.
But SpaceX has most likely paid little to no federal income taxes since its founding in 2002 and has privately told investors that it may never have to pay any, according to internal company documents reviewed by The New York Times.
The rocket maker’s finances have long been secret because the company is privately held. But the documents reviewed by The Times show that SpaceX can seize on a legal tax benefit that allows it to use the more than $5 billion in losses it racked up by late 2021 to offset paying future taxable income. President Trump made a change in 2017, during his first term, that eliminated the tax benefit’s expiration date for all companies. For SpaceX, that means that nearly $3 billion of its losses can be indefinitely applied against future taxable income.
Tax experts consulted by The Times said that not having to pay $5 billion in federal income taxes was substantial and notable for a company that has relied on contracts with the U.S. government to an unusual degree. SpaceX works closely with the Pentagon, NASA and other agencies, giving it a vital role in national security. In 2020, federal contracts generated almost 84 percent of the rocket maker’s revenue, according to the documents, a figure that had not been previously reported.
Larger tech companies — including some that have taken advantage of the tax benefit — often pay billions in federal income taxes. Microsoft, for one, said it expected to pay $14.1 billion in federal income taxes in its last fiscal year.
SpaceX can use the tax benefit even if its business thrives. By one measure of corporate profitability, the company had roughly $5 billion in earnings from its core operations last year, up from $2.6 billion in 2023, according to what the company has privately told some stakeholders.
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The post SpaceX Gets Billions From the Government. It Gives Little to Nothing Back in Taxes. appeared first on New York Times.
