Plain English Breakdown
The official text states there are exceptions ('except as provided') for taxpayers denied credits but does not specify what those exceptions are.
No Tax Breaks for ICE Contractors Act of 2026
For taxable years starting between January 1, 2027, and before January 1, 2032, this bill denies tax credits to taxpayers with contracts with the U.S. Department of Homeland Security and creates a new fund for immigration-related services.
What This Bill Does
- Denies all corporation tax credits available under existing law to any taxpayer that has a contract with the United States Department of Homeland Security, except as provided in the bill.
- Establishes the California Immigrant Resilience Fund within the State Treasury.
- Requires the Franchise Tax Board and the Department of Finance to estimate the extra revenue generated by denying these tax credits.
- Directs the Controller to transfer that estimated amount into the new fund.
- Makes money in the fund available for immigration-related services, including removal defense, if the Legislature approves spending it.
Who It Names or Affects
- Taxpayers who hold contracts with the United States Department of Homeland Security during taxable years beginning on or after January 1, 2027.
- The Franchise Tax Board and the Department of Finance regarding revenue estimates.
- The State Controller regarding fund transfers.
Terms To Know
- Tax credits
- Amounts that reduce the total tax a taxpayer must pay to the state under the Corporation Tax Law.
- Removal defense
- Legal services provided to people facing deportation or removal from the country, as mentioned in the bill's list of potential fund uses.
- Appropriation
- An official act by the Legislature required before money in the new fund can be spent on specific services.
Limits and Unknowns
- The denial of tax credits applies only to taxable years beginning on or after January 1, 2027, and before January 1, 2032.
- Money in the new fund cannot be used until the Legislature votes to appropriate it for specific purposes.
- The bill includes exceptions ('except as provided') regarding which taxpayers are denied credits, but does not list those exceptions.