Newsom signs 25% tax on private ICE detention centers in California

California Governor Gavin Newsom signed a bill earlier this week that would impose a 25 percent tax on private detention centers, a policy that would apply to all Immigration and Customs Enforcement (ICE) partner facilities in the Golden State.

“If we can’t evict private facilities, we will go after their profits,” Newsom said in a press release.

The move, which Newsom hailed as a way to push back against President Donald Trump’s immigration crackdown and what he sees as a practice of privatizing federal law enforcement, is raising concerns among immigration experts who believe the tax increase could force the government to explore alternative facilities less suitable for housing detainees. It also raises questions about what would happen if all eight ICE detention centers chose to suspend their operations in California.

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Governor Gavin Newsom speaks March 26, 2025 in Los Angeles. (Frazer Harrison/WireImage)

That’s the view of Hans von Spakovsky, senior counsel and immigration expert at Advancing American Freedom, a conservative-leaning think tank.

“It’s very clear that there is only one purpose for this gigantic tax increase in California, and that is to make sure that the federal government cannot find any private landlord, no private contractor in California who is willing to lease space from the federal government,” Spakovsky said in an interview with Fox News Digital.

“The alternative for the federal government is to look at all the different federal properties that the government actually owns there, which neither Newsom nor anyone else in California can impose any sort of tax on, and see if any of those federal facilities can be converted into a detention center.”

Spakovsky explained that this could mean repurposing warehouses or offices.

The new law, AB 1633, is among 20 other bills Newsom signed Tuesday. In its current form, the 25 percent tax applies to the gross income of any private detention facility and applies to recipients of federal, state, and local contracts. Proceeds from the bill will go to a “Due Process Fund for All,” intended for immigration-related services, according to the bill’s language. Now that AB 1633 has been signed into law, it will take effect on July 1, 2028.

Along with the bill, Newsom signed a handful of other restrictions.

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Governor Gavin Newsom speaks during a press conference on “new funding for homeless and mental health efforts” and criticized President Trump’s claims that ICE agents screen immigrants and citizens, in San Francisco, California, January 16, 2026. (Tayfun Coskun/Anadolu via Getty Images)

“We are also banning the Orwellian practice of using anti-shock gloves in law enforcement activities and further protecting access to our justice system,” Newsom said.

“We may not be able to dictate federal immigration policy, but we can make it clear that activities occurring in California will be subject to California law.”

Despite Newsom’s framing, Spakovsky believes the governor will affect the enforcement of federal immigration laws by limiting the overall space he has to operate. He pointed to reports from Immigration and Customs Enforcement (ICE) that detail his detention needs. He explained that the government relies, at least in part, on private contractors to avoid the costs of building its own facilities.

“If you look at that report, ICE currently has enough detention space for about sixty-six thousand aliens. Okay, that’s the total size of the federal government’s detention capacity,” Spakovsky said.

If an entire state’s private detention providers decided the tax was too high, ICE’s overall capacity could decline.

California is home to eight ICE detention centers, according to reports from the Department of Homeland Security (DHS). All are operated by individuals.

The GEO Group, a corrections company, owns five facilities. Imperial Valley Gateway Center LLC, a local holding company, has another. Two others were purchased by DHS in July, but are managed by CoreCivic, a corrections company, and have contracts through 2027 and 2029.

Although the bill won’t take effect until 2028, in the final year of his second term, Spakovsky believes the government could begin evaluating where else it could find partnerships to address its detention needs sooner rather than later.

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California Governor Gavin Newsom listens during a press conference on fentanyl seizures and border security at Montgomery-Gibbs Executive Airport February 2, 2026 in San Diego, California. (KC Alfred/The San Diego Union-Tribune via Getty Images)

“Look, if I were the federal government and I couldn’t find enough federal property in California to do this, then I would go to friendlier neighboring states where I could quickly transport the aliens that I have detained and I would rent facilities there.”

“I would go to Arizona. I would potentially go to Nevada. I would go to other states where they might be hungry for federal money and increased employment from private contractors hiring people to work on these facilities.”

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Gavin Newsom’s office did not immediately respond to a request for comment from Fox News Digital.