Link: SpaceX, a major federal contractor, “has most likely paid little to no federal income taxes since its founding in 2002.”

Elon Musk's SpaceX has likely avoided paying federal income taxes for years, leveraging legal tax benefits. Despite receiving billions in federal contracts, internal documents suggest it used accumulated losses of over $5 billion to offset taxable income.

SpaceX's major revenue sources include substantial federal contracts, with documents revealing that these contracts comprised roughly 84% of its 2020 revenue. Although privately held, disclosures to investors provide a rare glimpse into the company's financial operations.

Comparatively, other tech giants like Microsoft have paid billions in federal income taxes, underlining the significance of SpaceX's tax situation. Tax experts highlight the substantial advantage gained from not paying taxes on such a large scale of income.

President Trump's 2017 tax law change enabled SpaceX to indefinitely apply almost $3 billion in losses against future profits, enhancing its financial position. This tax benefit was originally intended to aid companies during tough economic times, not thriving enterprises.

The company's strategic use of tax benefits continues as its financial health improves, with significant earnings reported in recent years. Despite these gains, ongoing tax benefits from initial years of losses support SpaceX's expanding operations without the typical tax burdens.

While using such tax strategies, SpaceX remains a vital player in national security and space exploration, heavily supported by its government contracts. This situation underscores the complex relationship between large private companies and federal tax obligations.

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Yoooo, this is a quick note on a link that made me go, WTF? Find all past links here.