tax
ICE contractors could lose California tax credits
AB 1675 would bar those companies from claiming state credits for five tax years starting in 2027. The bill also would direct any extra revenue into a new immigrant support fund.
California’s AB 1675 would use the tax code to pressure companies that contract with ICE or other federal homeland security agencies. It would deny state tax credits for tax years beginning Jan. 1, 2027, through Jan. 1, 2032, and route the added revenue into a California Immigrant Resilience Fund.
- The bill would cut off state tax credits, not the corporate tax rate.
- It applies to tax years starting Jan. 1, 2027, through Jan. 1, 2031.
- The target is companies tied to ICE contracting.
- Recorded votes show it passed the Assembly 54-20.
- In California, AB 1675, the No Tax Breaks for ICE Contractors Act of 2026, would cut off state tax credits for companies covered by the bill if they do business with Immigration and Customs Enforcement, or ICE
In California, AB 1675, the No Tax Breaks for ICE Contractors Act of 2026, would cut off state tax credits for companies covered by the bill if they do business with Immigration and Customs Enforcement, or ICE. The denial would apply to taxable years beginning on or after Jan. 1, 2027, and before Jan. 1, 2032, while the measure itself would take effect immediately.
The point is not to rewrite the corporate tax rate. It is to turn tax expenditures, the credits companies use to lower what they owe, into a pressure point for firms linked to federal immigration enforcement contracts.
What gets taken off the table
Under the California Corporation Tax Law, credits can soften the tax bill in ways that matter to companies balancing labor costs, investments and compliance. AB 1675 would deny those credits entirely for covered taxpayers during the five-year window the bill sets out.
That makes the proposal more targeted than a broad tax increase. It singles out a specific relationship, contracts with ICE, and uses the loss of state tax benefits to make that relationship more expensive to keep.
A wide Democratic push
The bill is backed by 21 Democrats, including Assemblymembers Alex Lee, Mia Bonta, Juan Carrillo and Liz Ortega, with three principal coauthors and a long list of coauthors behind them. Recorded votes show it cleared the Assembly floor 54-20, with six other votes.
That kind of support does not settle the larger political fight around immigration or state taxation, but it does show the bill has been drafted as a party-backed tool rather than a lonely protest measure.