SpaceX, the aerospace company led by Tesla Chief Executive Officer Elon Musk, has reportedly secured billions of dollars in federal government contracts over the past 20 years, yet it is estimated that it has paid little to no federal corporate taxes, according to a report by the New York Times (NYT) on the 16th (local time).
The NYT reported that after obtaining and reviewing internal documents from SpaceX, the company has paid little to no federal income taxes since its founding in 2002 and may not pay them in the future, as it explained in private to investors.
According to the documents cited by the NYT, SpaceX, founded in 2002, had losses exceeding $5 billion by the end of 2021, and the company can offset certain losses against taxable income using legal tax benefits in the future. This means it does not have to pay federal corporate taxes until it generates profits.
Initially, there was a deadline for offsetting losses against taxable income, but the Trump administration eliminated this expiration date in 2017.
Greg Palski, a professor at New York University School of Law, said, "Given the scale of the operating losses, SpaceX has almost certainly not paid federal taxes for years," adding, "Even if there was taxable income in recent years, the likelihood of paying taxes is small."
The NYT pointed out that SpaceX's not paying federal corporate taxes is notable given that most of its revenue relies on federal contracts. According to the documents, the scale of federal contracts in 2020 was $1.4 billion, accounting for about 84% of SpaceX's total revenue. In 2021, it earned $1.7 billion (76% of revenue).
Daniel Bryan, a director of the 'Government Accountability Project,' which investigates government corruption and tax waste, criticized, "It is strange for SpaceX to use a tax relief system intended to encourage corporations to maintain operations during difficult times; this system was clearly not designed for such a successful company."
Earlier, Musk noted that SpaceX's revenue is expected to reach $15.5 billion this year. A significant portion of this is attributed to the satellite internet service Starlink, which currently has around 6 million subscribers, more than double the 2.5 million in 2023.