California Gov. Gavin Newsom signed a 25% tax on private ICE detention centers, a move an immigration expert says is meant to drive federal contractors out of the state.
Fox News Digital reported that Newsom signed AB 1633 earlier this week, imposing a 25% tax on the gross income of private detention centers that take federal, state, or local contracts, including every facility that partners with Immigration and Customs Enforcement in California.
The law takes effect July 1, 2028. Revenue is steered to a Due Process for All Fund set aside for immigration-related services. Newsom framed the bill as resistance to President Donald Trump’s immigration agenda and as a way to put California rules on activity inside the state.
California has eight ICE detention centers. All of them are privately operated. GEO Group owns five. Imperial Valley Gateway Center LLC owns one. The Department of Homeland Security bought two others in July; those sites are run by CoreCivic under contracts running through 2027 and 2029.
That private network is the backbone of federal detention capacity in the Golden State. The new tax does not ban the facilities outright. It goes after their earnings instead.
In a press release tied to the signing, Newsom left little doubt about the target.
The governor said:
"If we can’t kick out private facilities, we’ll go after their profits,"
He added:
"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 also announced a ban on shock gloves in enforcement activity and steps he described as further protecting access to the court system. The detention tax was one of about 20 bills he signed that day. His office did not immediately respond when Fox News Digital sought comment.
State pressure on ICE facilities is not unique to Sacramento. A federal judge blocked Colorado’s targeted crackdown on an Aurora ICE detention center, underscoring how far some blue states will go to hobble federal holding space, and how courts sometimes push back.
Hans von Spakovsky, a senior legal fellow and immigration expert at Advancing American Freedom, told Fox News Digital the purpose is plain.
Spakovsky said:
"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,"
He argued the federal government may have to look instead at properties it already owns in California, sites Newsom cannot tax, and convert them for detention use. If that falls short, he said, officials could move detainees to friendlier states.
Spakovsky pointed to Arizona and Nevada as options where leaders might welcome federal contracts and the jobs that come with private operators. The practical result, in his view, would be longer transports and fewer beds close to where illegal immigrants are arrested in California.
That approach fits a wider Democratic posture toward the agency. A DNC committee vote to abolish ICE and end immigration detention showed how open party organs have become about dismantling the tools Trump is trying to use.
Spakovsky cited ICE reporting that the federal government has detention space for about 66,000 aliens, the full size of current national capacity, in his telling. California’s eight private centers are part of that limited pool. Shrink or price them out, and the squeeze lands on enforcement everywhere, not just on the West Coast.
Private contractors exist in part because building and staffing federal facilities is slow and expensive. Tax their gross income at 25% and the math changes. Operators can absorb the hit, pass costs along, cut California work, or walk. The bill does not say which path they must take. It only raises the price of staying.
CoreCivic’s two DHS-owned sites already carry contracts into 2027 and 2029. GEO’s five California holdings and the Imperial Valley facility face the same tax once it switches on in 2028. That timing lands in the final year of Trump’s second term, when deportation operations would still need beds.
Legal fights over who stays in custody are already headed higher. The Supreme Court is taking a case that could force bond hearings for illegal immigrants in ICE custody, a ruling that would put even more pressure on limited detention space if releases expand.
Newsom cast the package as protecting immigrant communities and subjecting California activity to California rules. Spakovsky cast it as a one-purpose effort to dry up private partners so ICE cannot lease space in the state. Both descriptions sit in the public record. Neither has been tested yet in court on this bill.
What is not in dispute is the mechanism. A 25% gross-income tax is large. It applies to private detention centers under federal contract. Every ICE partner site in California is private today. The effective date is fixed. The fund receiving the money is labeled for immigration-related services.
Federal immigration enforcement is a national responsibility. When a state prices private partners out of the market, the beds do not magically appear somewhere else overnight. Agents still arrest people. Courts still process cases. The question becomes where those individuals are held, how far they are moved, and how many slots remain when the next surge hits.
Homeland Security officials have already described the deportation fight in blunt terms. DHS counsel framed Supreme Court stakes around hard choices on criminal migrants, a reminder that custody capacity is not an abstract ledger entry, it decides who can be removed and who cannot.
Newsom has mixed direct confrontation with Washington into other policy lanes as well, including a California AI kill-switch mandate advanced through executive order. The detention tax follows the same pattern: use state power to raise the cost of carrying out a federal priority the governor opposes.
AB 1633 does not repeal federal immigration statutes. It does not close a single center on day one. It tells private operators that doing business with ICE in California will get more expensive in 2028, and it tells the federal government to find other roofs or other states if the contractors flinch.
Taxpayers elsewhere should watch where the beds go next. When California makes detention harder, the backlog and the costs do not stay inside California’s borders.
