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

California Governor Gavin Newsom signs a sweeping package of over 20 immigration bills, headlined by Assembly Bill 1633, which levies a first-of-its-kind 25% gross income tax on private detention centers starting July 1, 2028. The legislative pushback targets the Trump administration's hardline immigration policies, including a mandatory detention directive that the U.S. Supreme Court agreed to review on October 1, 2026, after lower courts repeatedly declared it unlawful.

California's tax on private detention facilities

• ▪The 25% tax established by Assembly Bill 1633 will take effect on July 1, 2028, and is estimated by a legislative fiscal analysis to generate approximately $177 million.
• ▪Revenue generated from the 25% tax under Assembly Bill 1633 will be directed to the newly created Due Process for All Fund to finance immigration-related services.
• ▪California Governor Gavin Newsom signed Assembly Bill 1633 on September 29, 2026, imposing a 25% tax on the gross income of for-profit corporations operating private detention facilities.

Private detention facilities

• ▪Two of California's eight privately operated Immigration and Customs Enforcement detention centers are run by CoreCivic under contracts extending through 2027 and 2029.
• ▪California is home to eight privately operated Immigration and Customs Enforcement detention centers, five of which are owned by The GEO Group, one by Imperial Valley Gateway Center LLC, and two by the Department of Homeland Security.

Federal detention alternatives

• ▪Hans von Spakovsky suggested that the federal government could lease detention facilities in neighboring states, such as Arizona or Nevada, to meet its immigration detention needs.
• ▪Hans von Spakovsky of Advancing American Freedom stated that California's 25% tax is intended to prevent private contractors from leasing space to the federal government, which could force federal agencies to seek alternative properties.

California's broader immigration legislative package

• ▪The California legislative package signed on September 29, 2026, banned the use of battery-powered, electric-shock-delivering gloves in law enforcement activities within California.
• ▪California Governor Gavin Newsom signed a package of over 20 immigration-related bills on September 29, 2026, aimed at increasing transparency, accountability, and oversight of federal immigration enforcement in California.
• ▪The California legislative package signed on September 29, 2026, included Senate Bill 747, the No Kings Act, which allows individuals to file civil lawsuits against government officials, including federal officers, for constitutional violations.

Newsom's actions on other immigration bills

• ▪California Governor Gavin Newsom signed Assembly Bill 1806, requiring the California Attorney General to conduct independent investigations when a federal immigration agent fatally shoots an unarmed civilian in California.
• ▪California Governor Gavin Newsom vetoed Assembly Bill 1896, which would have disqualified individuals who previously participated in federal immigration enforcement from being hired by California state, county, or local public agencies.
• ▪California Governor Gavin Newsom signed Assembly Bill 1807, which prohibits the use of state-owned properties, including parking lots and garages, for preparing, processing, or detaining individuals during federal immigration enforcement operations.

The federal mandatory detention policy

• ▪Immigrants filed more than 73,000 cases in federal court in 2026 challenging the Trump administration's detention policy, with hundreds of judges ruling more than 4,400 times that the detentions were unlawful.
• ▪The U.S. Department of Homeland Security issued guidance in July 2025 subjecting immigrants who entered the United States illegally to mandatory detention without bond during deportation proceedings.
• ▪The Trump administration's July 2025 mandatory detention policy departed from a nearly three-decade-old interpretation of federal law that allowed immigrants living in the United States to be released on bond.

Supreme Court review of detention policy

• ▪The U.S. Supreme Court agreed on October 1, 2026, to hear the Trump administration's appeal of a ruling by the 2nd U.S. Circuit Court of Appeals that struck down the mandatory immigration detention policy.
• ▪The Supreme Court case arose from a challenge by Ricardo Aparecido Barbosa da Cunha, a Brazilian national arrested in September 2025 who was initially denied a bond hearing under the Trump administration's policy.

Debatable claims

• ▪California's 25% tax on private detention centers is a justified use of state power
• ▪Mandatory detention of undocumented immigrants during deportation proceedings is justified