4 minPolitics
Newsom Signs 25% Tax on Private Detention Centers in California
California Gov. Gavin Newsom signed AB 1633, imposing a 25% tax on private detention facilities that contract with ICE, effective July 1, 2028. The law is part of a broader pushback against President Trump's immigration enforcement and has raised concerns about detention capacity and federal alternatives.
California Gov. Gavin Newsom signed legislation this week imposing a 25% tax on private detention centers that contract with U.S. Immigration and Customs Enforcement (ICE), a move aimed at undercutting the Trump administration's reliance on privately operated immigration detention. The bill, AB 1633, applies to the gross income of any private detention facility and covers federal, state, and local contract recipients. Revenue from the tax will be directed to a «Due Process for All Fund» for immigration-related services, according to the bill's language.
«If we can't kick out private facilities, we'll go after their profits,» Newsom said in a press release. The governor framed the measure as a way to push back against what he described as the privatization of federal immigration enforcement. Alongside AB 1633, Newsom signed a series of other restrictions, including a ban on the use of shock gloves in enforcement activity and additional protections for access to the court system. «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,» he said.
The law will take effect on July 1, 2028, placing it in the final year of President Donald Trump's second term. California is home to eight ICE detention facilities, all of which are privately operated, according to Department of Homeland Security reporting. The GEO Group owns five of them. Imperial Valley Gateway Center LLC owns one. Two others were purchased by DHS in July but are run by CoreCivic, a prison company, and hold contracts through 2027 and 2029.
Immigration experts warn the tax could have unintended consequences. Hans von Spakovsky, a senior legal fellow with the conservative-leaning think tank Advancing American Freedom, said the tax's purpose is to make it impossible for the federal government to find private property owners or contractors in California willing to lease space for detention. «It's very clear that there's only one purpose to this California gigantic tax increase, and that is to make sure that the federal government cannot find any private property owners, any private contractors in California that are willing to lease space to the federal government,» Spakovsky said.
He suggested the federal government may instead look to convert federally owned properties in California — such as warehouses or office space — into detention facilities, since those properties would be beyond the reach of state taxation. If that proves insufficient, Spakovsky said, ICE could transport detainees to neighboring states with friendlier policies. «I'd go to Arizona. I'd potentially go to Nevada. I'd go to other states where they might be eager for federal government money and the increased employment from private contractors hiring people to work on these facilities,» he said.
Spakovsky pointed to ICE data showing the agency currently has detention space for about 66,000 people nationwide. If all eight California facilities suspended operations in response to the tax, that capacity could shrink significantly. The government relies on private contractors in part to avoid the cost of building its own facilities. Although the tax does not take effect until 2028, Spakovsky believes federal officials may begin evaluating alternative partnerships sooner rather than later.
The office of Gavin Newsom did not immediately respond to a request for comment. The bill was among 20 others Newsom signed on Tuesday, signaling a broader effort by California to assert its legal authority over immigration-related activities within its borders even as it cannot directly set federal policy.
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