TL;DRCalifornia hoped for billions from SpaceX, OpenAI, and Anthropic IPOs. But single-trigger RSUs, tender offers, and loans-against-shares are shrinking the windfall.
SpaceX is now valued at $2.5 trillion. OpenAI and Anthropic are expected to go public later this year at valuations approaching $1 trillion each. California, where all three companies are based or have significant operations, should be looking at the largest IPO tax windfall in state history. The reality may be more complicated.
Facebook’s 2012 IPO generated $1.3 billion in California taxes on a $104 billion valuation. Simple math would suggest that IPOs at 10 to 25 times that valuation should produce proportionally more. But the way tech employees are compensated has changed, and so have the tools available to minimise tax bills.
SpaceX uses a stock-pay structure that is unusual among private companies. Most startups issue dual-trigger RSUs, where shares vest only when two conditions are met: continued employment and a liquidity event like an IPO. That creates a massive taxable event on IPO day. Many SpaceX employees, however, have single-trigger RSUs, meaning their shares vest on employment alone. They have been paying income taxes on those shares for years, pulling the tax revenue forward and making it less predictable.
