California Gov. Gavin Newsom has signed a law imposing a 25 percent tax on private detention facilities, directly targeting companies that contract with Immigration and Customs Enforcement as part of his continued resistance to President Donald Trump’s immigration enforcement agenda.
Assembly Bill 1633, signed Tuesday, applies the tax to gross income earned by private detention centers through federal, state and local government contracts. The law takes effect July 1, 2028, with proceeds flowing into a new Due Process for All Fund to support immigration-related legal services.
Newsom’s Message to Private Contractors
Newsom was direct about the intent behind the legislation. “If we can’t kick out private facilities, we’ll go after their profits,” he said in a statement accompanying the signing. He also signed several related measures, including restrictions on the use of electric shock gloves during immigration enforcement activities.
“We may not be able to dictate federal immigration policy, but we can make clear that activities taking place in California will be subject to California law,” Newsom said. The legislation carries particular weight in California, where all eight ICE detention centers are privately operated, meaning the tax would touch every facility in the state used for federal immigration detention.
For more on California’s new ICE detention tax, the measure represents one of the most aggressive state-level challenges yet to the federal government’s immigration enforcement infrastructure.
Legal Critics Warn of Enforcement Disruptions
Hans von Spakovsky, senior legal fellow at the think tank Advancing American Freedom, argued the law is designed with a single goal in mind. “It’s very clear that there’s only one purpose to this California gigantic tax increase,” he told Fox News Digital, saying Newsom wants to make private contractors unwilling to lease detention space to the federal government.
Von Spakovsky warned that if existing contractors suspend operations rather than absorb the added cost, ICE could be forced to repurpose federally owned warehouses or office buildings as detention space. He estimated that ICE currently holds approximately 66,000 people nationwide and relies heavily on private facilities to sustain that capacity.
What Could Come Next for ICE Operations
One potential outcome analysts have raised is that ICE shifts detention operations to neighboring states. Arizona and Nevada, where private contractors might welcome the federal investment and the jobs that come with it, have been mentioned as possible alternatives if California-based companies choose to exit their federal contracts.
The law does not take effect until mid-2028, giving affected companies and federal agencies time to respond. Whether that response involves legal challenges, operational restructuring or a move out of state, the coming years are likely to see sustained conflict between California’s government and federal immigration authorities over detention policy.
