California’s counting on an IPO tax windfall. Several factors are complicating the equation

Livestream Menu The IPOs of SpaceX, OpenAI and Anthropic could create a tax windfall for the state of California. The burst of tech wealth has drawn comparison to the 2012 IPO of Menlo Park-based Facebook, which generated $1.3 billion in taxes for the Golden State. But the revenue impact may be blunted, due to how these employees' stock compensation was structured and because tech employees today have more tools at their disposal to mitigate their tax burden. SPCX The iconic Golden Gate Bridge and the stunning San Francisco skyline as seen from the Marin Headlands during the vibrant spring season. Dan Kurtzman | Moment | A version of this article first appeared in CNBC's Inside Wealth with Robert Frank, a weekly guide to the high-net-worth investor and consumer.  to receive future editions, straight to your inbox. The blockbuster SpaceX IPO and potential upcoming public offerings for OpenAI and Anthropic could create a tax windfall for the state of California. Yet the revenue boost may fall short of previous tech IPOs – at least relative to the firms' valuations – given the specific nature and tax treatment of today's tech compensation. Following its IPO last week, SpaceX is now valued at $2.5 trillion, minting many of its employees who live and work near its Hawthorne, California, office as millionaires, at least on paper. California-based Anthropic and OpenAI are also expected to go public later this year at valuations that could approach $1 trillion. The burst of tech wealth has drawn comparison to the 2012 IPO of Menlo Park-based Facebook, which generated $1.3 billion in taxes for the Golden State, per the California Department of Finance's estimate. Facebook's valuation at the time was just $104 billion, suggesting the new crop of super-IPOs could theoretically generate billions more. But the revenue impact may be blunted, due to how these employees' stock compensation was structured and because tech employees today have more tools at their disposal to mitigate their tax burden, experts and financial advisors told CNBC.  As companies have stayed private for longer and reached sky-high valuations, financial institutions have increasingly catered to equity-rich, cash-poor startup employees with tax strategies that were traditionally only available to founders.  For instance, employees at some startups can get a tax deduction , pre-IPO stock to a donor-advised fund, according to Richard Lowry of wealth manager Cresset. Tax revenue generated : ordinary income taxes on employees' restricted stock units, or RSUs, when they vest and capital gains taxes paid when shareholders sell appreciated stock.  SpaceX uses a unique stock-pay structure that may have pulled forward the tax revenue on the vesting of employees' shares.