CEO of SpaceX and Tesla Elon Musk speaks during the World Economic Forum (WEF) annual meeting in Davos, Switzerland on January 22, 2026.
How Much Federal Income Tax Will Elon Musk’s Tesla Pay on $5.7 Billion in 2025 Revenue? $0
The Trump administration and Republicans in Congress "have allowed a hugely profitable corporation to avoid paying even a dime of federal income tax on their 2025 US profits."
Tesla, the electric car company led by former Trump administration special government employee Elon Musk, released its annual financial report Thursday, showing that it doubled its yearly income in 2025 over the previous year and brought in $5.7 billion.
The company, whose CEO spent several months rooting out what he claimed was fraud and waste across the federal government, reported "precisely zero current federal income tax" on the billions it made, according to an analysis by the Institute on Taxation and Economic Policy (ITEP).
The group explained that Tesla used accelerated depreciation, reducing the value of its capital assets, while also slashing its tax bill with tax breaks for its executive stock options.
Research and development tax credits netted $352 million in additional tax savings, and the company used "net operating losses stored up from previous years to offset current year income, although it’s hard to know how much of that affects US income rather than foreign income," said ITEP.
Analyzing the financial report, ITEP found that Tesla received over $1.1 billion in federal income tax breaks, paid for by US taxpayers, last year alone—after paying 0.4% of its US profits in federal income taxes over the previous three years.
Over that time period, said ITEP, "the Elon Musk-led company reported $12.58 billion of U.S. income on which its current federal tax was just $48 million... The company reported an effective federal income tax rate of 0.4%. This is a tiny fraction of the 21% tax rate profitable corporations are supposed to pay under the law."
The most it paid in taxes over the past three years was in 2023, when Tesla paid $48 million, at the federal effective tax rate of 1.2%. That was still just a fraction of the $823 million it would have paid if it had paid the federal corporate tax rate. In 2023, the company enjoyed $775 million in tax breaks.
The company's income tax payments worldwide in 2025 totaled $1.2 billion, with more than $1 billion going to China and other foreign governments. Tesla paid $28 million to the US government, "presumably related to tax years before 2025," said ITEP.
The organization noted that the "billion-dollar tax break" enjoyed by Tesla does not appear to be illegal.
However, ITEP said, it illustrates how the Trump administration and Republicans in Congress, by passing changes to corporate tax laws in the One Big Beautiful Bill Act (OBBBA) last summer, "have allowed a hugely profitable corporation to avoid paying even a dime of federal income tax on their 2025 US profits."
The organization warned last summer that special business tax breaks included in the OBBBA, including a reinstatement of bonus depreciation and new international rules, would cost the US government $165 billion in revenue in 2026.
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Tesla, the electric car company led by former Trump administration special government employee Elon Musk, released its annual financial report Thursday, showing that it doubled its yearly income in 2025 over the previous year and brought in $5.7 billion.
The company, whose CEO spent several months rooting out what he claimed was fraud and waste across the federal government, reported "precisely zero current federal income tax" on the billions it made, according to an analysis by the Institute on Taxation and Economic Policy (ITEP).
The group explained that Tesla used accelerated depreciation, reducing the value of its capital assets, while also slashing its tax bill with tax breaks for its executive stock options.
Research and development tax credits netted $352 million in additional tax savings, and the company used "net operating losses stored up from previous years to offset current year income, although it’s hard to know how much of that affects US income rather than foreign income," said ITEP.
Analyzing the financial report, ITEP found that Tesla received over $1.1 billion in federal income tax breaks, paid for by US taxpayers, last year alone—after paying 0.4% of its US profits in federal income taxes over the previous three years.
Over that time period, said ITEP, "the Elon Musk-led company reported $12.58 billion of U.S. income on which its current federal tax was just $48 million... The company reported an effective federal income tax rate of 0.4%. This is a tiny fraction of the 21% tax rate profitable corporations are supposed to pay under the law."
The most it paid in taxes over the past three years was in 2023, when Tesla paid $48 million, at the federal effective tax rate of 1.2%. That was still just a fraction of the $823 million it would have paid if it had paid the federal corporate tax rate. In 2023, the company enjoyed $775 million in tax breaks.
The company's income tax payments worldwide in 2025 totaled $1.2 billion, with more than $1 billion going to China and other foreign governments. Tesla paid $28 million to the US government, "presumably related to tax years before 2025," said ITEP.
The organization noted that the "billion-dollar tax break" enjoyed by Tesla does not appear to be illegal.
However, ITEP said, it illustrates how the Trump administration and Republicans in Congress, by passing changes to corporate tax laws in the One Big Beautiful Bill Act (OBBBA) last summer, "have allowed a hugely profitable corporation to avoid paying even a dime of federal income tax on their 2025 US profits."
The organization warned last summer that special business tax breaks included in the OBBBA, including a reinstatement of bonus depreciation and new international rules, would cost the US government $165 billion in revenue in 2026.
Tesla, the electric car company led by former Trump administration special government employee Elon Musk, released its annual financial report Thursday, showing that it doubled its yearly income in 2025 over the previous year and brought in $5.7 billion.
The company, whose CEO spent several months rooting out what he claimed was fraud and waste across the federal government, reported "precisely zero current federal income tax" on the billions it made, according to an analysis by the Institute on Taxation and Economic Policy (ITEP).
The group explained that Tesla used accelerated depreciation, reducing the value of its capital assets, while also slashing its tax bill with tax breaks for its executive stock options.
Research and development tax credits netted $352 million in additional tax savings, and the company used "net operating losses stored up from previous years to offset current year income, although it’s hard to know how much of that affects US income rather than foreign income," said ITEP.
Analyzing the financial report, ITEP found that Tesla received over $1.1 billion in federal income tax breaks, paid for by US taxpayers, last year alone—after paying 0.4% of its US profits in federal income taxes over the previous three years.
Over that time period, said ITEP, "the Elon Musk-led company reported $12.58 billion of U.S. income on which its current federal tax was just $48 million... The company reported an effective federal income tax rate of 0.4%. This is a tiny fraction of the 21% tax rate profitable corporations are supposed to pay under the law."
The most it paid in taxes over the past three years was in 2023, when Tesla paid $48 million, at the federal effective tax rate of 1.2%. That was still just a fraction of the $823 million it would have paid if it had paid the federal corporate tax rate. In 2023, the company enjoyed $775 million in tax breaks.
The company's income tax payments worldwide in 2025 totaled $1.2 billion, with more than $1 billion going to China and other foreign governments. Tesla paid $28 million to the US government, "presumably related to tax years before 2025," said ITEP.
The organization noted that the "billion-dollar tax break" enjoyed by Tesla does not appear to be illegal.
However, ITEP said, it illustrates how the Trump administration and Republicans in Congress, by passing changes to corporate tax laws in the One Big Beautiful Bill Act (OBBBA) last summer, "have allowed a hugely profitable corporation to avoid paying even a dime of federal income tax on their 2025 US profits."
The organization warned last summer that special business tax breaks included in the OBBBA, including a reinstatement of bonus depreciation and new international rules, would cost the US government $165 billion in revenue in 2026.