Elon Musk’s Company Town Just Voted to Hand SpaceX a $7.5 Million Tax Refund

It’s only been a few months since Elon Musk got his dream company town, and Starbase is proving to be well worth it for the rocket billionaire.

The Starbase City Commission nominated two SpaceX projects for the Texas Enterprise Zone tax-break program, propping the company for a hefty $7.5 million tax refund, according to local news outlet ValleyCentral.com. The company town, mostly comprised of SpaceX employees, voted on Wednesday during a public hearing for the Starship building factory, Gigabay, as well as the rocket’s launchpad infrastructure.

Cashing in

The Texas Enterprise Zone grants companies economic incentives through tax refunds, aiming to encourage private investment and job opportunities in “economically distressed” parts of the state, according to the Texas governor’s office. In order to qualify for the tax refunds, companies need to be nominated by the local communities where they are located.

According to the program, if a company spends at least $250 million and creates at least 500 new job opportunities, then it is eligible for the “triple jumbo project” designation and could receive $3.75 million in tax refunds.

SpaceX’s first eligible project is a massive production facility for its Starship and Super Heavy boosters. The company is seeking to invest $506 million to build Gigabay, with a goal to manufacture 1,000 Starship rockets a year at the facility.

SpaceX is also planning on expanding the launch infrastructure to support its next-generation Starship rocket and its increased launch cadence. The Starship Infrastructure Expansion Project is expected to generate 500 new jobs at Starbase, with 25% of new positions to be filled by local residents, according to the company. SpaceX intends to reinvest its tax refund into Starship operations and infrastructure.

“Between the first project and this project we’re adding over 1,000 jobs in about a one-year span,” Damian Barrera, a tax manager at SpaceX, said during the public hearing, according to Valley Central. “So this is something we’re very excited about.”

Musk first pitched the idea of turning Starbase into its own city in 2021, a long-held dream that could grant SpaceX the right to build more facilities and change the surrounding landscape. In May, the SpaceX CEO got his wish when residents voted in favor of turning Starbase into its own city. The city spans about 1.6 square miles (4.1 square kilometers) and is home to roughly 500 nearby residents, the majority of whom are SpaceX employees and contractors.

Following the local community’s vote in favor of SpaceX cashing in on the tax refund, the state will still need to approve the nominations before it grants the company its money. A maximum of 105 projects are approved statewide every two years.