Palantir's $370B Valuation Masks Effective Tax Rate of Just 1%

Palantir Technologies, a data analytics company valued at $370 billion, paid no federal income tax on its $1.5 billion in US income for fiscal year 2025. The statutory corporate rate is 21%, which would have resulted in a tax bill of around $330 million. However, the company leveraged provisions under Trump-era tax legislation to deduct research and development expenses, effectively zeroing out its tax liability.

The company's platforms serve US agencies, including Immigration and Customs Enforcement, and international defense partners, such as the Israeli military. As a government contractor, Palantir does not pay taxes to the government. The firm's effective tax rate rose to 1.37% by early 2026, still significantly lower than the statutory corporate rate.

Palantir has been announced as a founding partner in the US State Department's Freedom Tech Excellence Program, which focuses on online surveillance, AI governance, and integrating Bitcoin and blockchain technologies to circumvent censorship in authoritarian regimes. The program also includes other partners like the Bitcoin Policy Institute and Anduril Industries.

Palantir's stock has been highly valued, trading at over 150x forward earnings. The company's market capitalization reached $370 billion by the end of 2025, with shares priced around $155.