Eli Musk's Spacex Doesn't Pay Taxes, Gov Already Lost Billions

Illustration by Joan Wong, Photographs by Meridith Kohut for The New York Times, Carly Zavala for The New York Times

By Susanne Craig and Kirsten Grind

Susanne Craig and Kirsten Grind can be sent tips at nytimes.com/tips.

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 tax on $5 billion in taxable income 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.

Danielle Brian, the executive director of the Project on Government Oversight, a group that investigates corruption and waste in the government, said the tax benefit had historically been aimed at encouraging companies to stay in business during difficult times.

It was “quaint” that SpaceX was using it, she said, as it “was clearly not intended for a company doing so well.”

Mr. Musk has built SpaceX into one of the world’s most influential companies, which dominates the space industry through its rockets and its Starlink satellite internet service. It has been a jewel in the crown of his business empire and an essential source of his wealth and power, along with his electric vehicle company, Tesla. It has also given Mr. Musk a perch on the world stage, allowing him to weigh in on geopolitics.

A SpaceX Starship rocket in Boca Chica, Texas. SpaceX has been a jewel 

in the crown of Elon Musk’s business 

empire.Credit...Meridith Kohut for The New York Times

Image

Like many tech start-ups, SpaceX lost money as it plowed billions of dollars into building its business. Uber, Amazon, Tesla and other tech firms were also not profitable for years. As SpaceX has grown, the firm has been valued at more than $350 billion, crowning it one of the world’s most valuable private companies, according to the start-up tracker PitchBook. 

Several news organizations have reported on aspects of SpaceX’s finances, which the company discloses to its investors and other stakeholders. But the documents reviewed by The Times — including income statements and balance sheets covering 23 years — offered new insight into SpaceX’s revenue sources, investors and taxes.

SpaceX appears to have paid some income taxes over the years, though likely not to the federal government, according to the documents. In one document, the company said it expected to pay $483,000 in income tax to foreign governments and $78,000 in state income tax in 2021. Separately, it reported paying $6,000 for income taxes in 2020 and 2021, but did not disclose if the payments were for federal, state or local governments.

SpaceX and Mr. Musk did not respond to requests for comment. Mr. Musk has often trumpeted SpaceX’s role in carrying out missions for NASA and other agencies. In June, he proudly postedon social media that the company had reached a milestone, as its “commercial revenue from space will exceed the entire budget of @NASA next year.”