Newsom Signs 25% Tax on Private ICE Facility Profits

California will tax the profits of privately operated immigration lockups at 25%, under legislation Gov. Gavin Newsom signed, according to Fox News. The measure applies to every for-profit facility in the state that houses federal immigration detainees under contract with U.S. Immigration and Customs Enforcement.

What did Newsom sign?

The governor's signature puts a new state levy on top of existing corporate taxes paid by companies that run immigration custody sites in California, Fox News reports. The outlet describes the move as a direct response to the Trump administration's reliance on privately contracted facilities to hold detainees as immigration enforcement has expanded nationwide.

Which facilities are covered?

The tax reaches every privately run site in California that holds people in ICE custody, per Fox News' reporting. That includes operators that contract directly with the federal government to provide bed space for detainees awaiting processing, hearings or removal.

How does the tax work?

The law adds a 25% state tax specifically on profits those operators generate from their California contracts, according to the Fox News account. The outlet frames it as a financial lever aimed at the business model behind privately run custody operations rather than at federal enforcement authority itself, which the state cannot regulate directly.

By the Numbers

• 25% — state tax rate now applied to profits at privately run immigration custody facilities in California
• 2026 — year Newsom signed the measure into law, per Fox News

Why is this framed as pushback on Trump's agenda?

Fox News characterizes the bill as part of a broader state effort to counter federal immigration policy under President Trump by targeting the financial incentives of private operators rather than challenging enforcement directly in court. The outlet's headline calls it a "sweeping pushback" against the administration's approach, though the piece does not include a direct quote from Newsom or his office explaining the rationale in his own words.

What happens next for private operators?

Companies that hold ICE contracts in California will need to account for the new tax in their state filings going forward. Fox News does not report an effective date beyond the signing itself, nor does it detail enforcement mechanisms the state will use to verify compliance among contract holders.

What to Watch

• Whether private operators challenge the tax in court as an improper state interference with federal immigration contracts
• Whether other states introduce similar profit taxes targeting ICE-contracted facilities
• How the Trump administration responds, given its reliance on private capacity to expand detention bed space
• Whether California lawmakers follow with additional measures affecting federal immigration contractors operating in the state

Fox News' original report is available here.