Musk Leaves California for Texas... Aiming to Avoid Taxes

by Kwon Jaehee

Published 08 Dec.2020 11:28(KST)

Musk Foundation Already Relocated to Austin, Texas
Recently Spending More Time in Texas

▲Elon Musk, CEO of Tesla [Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Speculation is growing that Elon Musk, CEO of Tesla, will leave California, where he has lived for decades, and move his residence to Texas. The 'Musk Foundation' has already relocated to Austin, Texas, and recently, Musk has been spending more time in Texas, adding weight to these expectations. Some speculate that Musk's move to Texas, which has no state income tax, is aimed at tax savings.

According to Bloomberg on the 7th (local time), the 'Musk Foundation' created by Musk merged with another foundation established last summer in Austin, Texas, effectively moving from California to Austin.

Musk has SpaceX’s engine testing and rocket production facilities in Texas, and is building the fifth Gigafactory near Austin to produce Tesla’s electric pickup truck and Model Y sport utility vehicle (SUV).

Additionally, Musk has recently been spending more time in Texas, leaving Los Angeles, California, where he lived for over 20 years.

Bloomberg reported, "Musk had conflicts with California state authorities over economic lockdown measures due to COVID-19."

In fact, last May, Musk opposed the factory shutdown order issued by local California authorities for COVID-19 prevention and expressed his intention to move Tesla’s headquarters to Texas or Nevada.

Earlier on the 4th, CNBC reported that Musk told acquaintances he would move to Texas and had put his California mansion on the market.

CNBC stated, "Although Musk’s address is still in California, he has already obtained a Texas driver’s license," and speculated, "Musk’s move to Texas is likely for tax savings."

California’s income tax rate is 13.3%, the highest in the United States, while Texas has no state income tax.

CNBC explained that Musk received stock options worth $50 billion (about 54 trillion won) from Tesla in 2018, and if he exercises these options after moving to Texas, he would not have to pay state income tax.