California Governor Newsom Signs 25% Tax on Private Immigration Detention Centers

California Governor Gavin Newsom has signed a bill that will impose a 25% tax on private detention centers operating within the state and contracting with U.S. Immigration and Customs Enforcement (ICE). Newsom stated the move is intended to counter federal immigration policies and target the profits of these private facilities.

The legislation, Assembly Bill 1633, applies to the gross income of private detention facilities that partner with federal, state, or local authorities. Revenue generated by the tax will be allocated to a "Due Process for All Fund" to support immigration-related services. The bill is scheduled to go into effect on July 1, 2028.

Newsom, in a press release, characterized the bill as a pushback against what he described as former President Donald Trump's immigration tactics and the privatization of federal enforcement. He asserted that while California may not dictate federal immigration policy, it can ensure activities within the state comply with its laws.

Immigration experts have raised concerns about the potential impact of the tax. Hans von Spakovsky, a senior legal fellow at Advancing American Freedom, suggested that the increased tax could compel the federal government to seek alternative housing for detainees, potentially repurposing federal properties like warehouses or office spaces. He argued that the primary goal of the tax is to make it difficult for private contractors in California to lease space to the federal government.

California currently hosts eight privately operated ICE detention facilities. Companies like The GEO Group and CoreCivic operate several of these facilities, with some contracts extending through 2029. If private detention contractors in California cease operations due to the tax, it could significantly reduce ICE's overall detention capacity.

In addition to the tax on detention centers, Newsom also signed other bills restricting certain practices. These include banning the use of shock gloves in enforcement activities and further protecting access to the court system.

Spakovsky suggested that if federal facilities in California become unviable, ICE might look to neighboring states like Arizona or Nevada for partnerships, where officials may be more amenable to federal contracts and the associated employment opportunities. The office of Governor Newsom did not immediately respond to a request for comment.