California Gov. Gavin Newsom has signed a bill imposing a 25% tax on private detention centers that contract with Immigration and Customs Enforcement, a move explicitly aimed at undercutting President Donald Trump’s immigration enforcement in the state.
“If we can’t kick out private facilities, we’ll go after their profits,” Newsom said in a press release announcing the measure.
The law, AB 1633, was one of 20 bills Newsom signed on Tuesday. It taxes the gross income of any private detention facility holding federal, state or local contracts, with the revenue funneled into a “Due Process for All Fund” for immigration-related services. The tax takes effect July 1, 2028.
Every ICE detention facility in California, all eight of them, is privately run. The GEO Group operates five. Imperial Valley Gateway Center LLC owns one. The remaining two were purchased by the Department of Homeland Security in July but are operated by CoreCivic under contracts running through 2027 and 2029.
Critics say the real target is federal enforcement capacity
Hans von Spakovsky, senior legal fellow at the conservative-leaning think tank Advancing American Freedom, says the tax has one real purpose.
“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.
Spakovsky argues the federal government’s fallback would be to convert federal properties, warehouses, office space, into detention sites, since California cannot tax land the government itself owns. He cited ICE reporting showing the agency currently has detention capacity for roughly 66,000 people nationwide. If California’s private contractors pull out rather than pay the tax, that national capacity shrinks.
He also predicted the government could simply move operations out of state entirely.
“If I was the federal government and I couldn’t find enough federal properties in California to do this, I would then go into neighboring friendlier states that I could quickly transport aliens I’ve detained and I would lease and rent facilities there. 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.”
More restrictions signed alongside the tax
Newsom also signed bans on the use of shock gloves during enforcement activity and additional protections for access to California’s court system.
“We’re also banning the Orwellian practice of using shock gloves in enforcement activity as well as further protecting access to our court system,” Newsom said. “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.”
The tax doesn’t take effect until 2028, Trump’s final year in office, but Spakovsky believes federal officials may start scouting alternative sites well before then. Newsom’s office did not respond to a request for comment.
