The Reason Tesla Doesn’t Pay Income Taxes

Elon Musk’s company profits from green energy tax breaks passed by Democrats

WSJ editorial. Excerpts:

"Tesla gets special treatment, all right, except it’s from government mandates and tax breaks that Democrats created."

"Its offense in progressive eyes is taking advantage of tax breaks and write-offs that Congress has designed to encourage research and development and investment, especially in green energy."

"most of Tesla’s $7.1 billion in net income last year doesn’t even derive from selling electric vehicles, solar panels or battery storage. Some $2.8 billion came from the sale of regulatory credits to other auto makers that need to comply with government EV mandates."

"Tesla made another $1.6 billion in interest income on cash and short-term investment holdings. Democrats can thank the Biden inflation for allowing companies to earn higher interest on their cash holdings."

"The main reason Tesla pays little to no tax is because it lost money every year it was in business from 2003 until 2020. All companies are allowed to carry forward net operating losses to offset future tax liabilities. This encourages business formation since it can take years of sweat capital before companies turn a profit."

"Democrats . . . exempted most net operating losses from the Inflation Reduction Act’s 15% corporate alternative minimum tax." 

"Democrats have long understood this, which is why they exempted most net operating losses from the Inflation Reduction Act’s 15% corporate alternative minimum tax."

"Tesla recorded $625 million from tax credits for its electric vehicles and $756 million for its solar and energy storage business last year, mostly from manufacturing batteries in the U.S."