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AB-1675 • 2026

Corporation Tax Law: tax expenditures: No Tax Breaks for ICE Contractors Act of 2026.

Corporation Tax Law: tax expenditures: No Tax Breaks for ICE Contractors Act of 2026.

Budget Labor Taxes
Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor
Lee (A) , Bonta (A) , Carrillo (A) , Ortega
Last action
2026-04-20
Official status
In committee: Set, first hearing. Referred to REV. & TAX. suspense file.
Effective date
Not listed

Plain English Breakdown

The bill summary and digest do not specify how unused funds will be handled, only that they would be available for immigration-related services upon appropriation by the Legislature.

No Tax Breaks for ICE Contractors Act

The No Tax Breaks for ICE Contractors Act removes tax breaks for corporations that contract with the U.S. Department of Homeland Security in California, starting from tax year 2027.

What This Bill Does

  • Removes all tax expenditures available under the Corporation Tax Law for any taxpayer contracting with the United States Department of Homeland Security between January 1, 2027 and January 1, 2032.
  • Establishes the California Immigrant Resilience Fund in the State Treasury to provide immigration-related services upon appropriation by the Legislature.
  • Requires the Franchise Tax Board to estimate additional revenue from these companies due to the new tax rules and transfer this amount to the newly created fund.

Who It Names or Affects

  • Corporations that contract with the U.S. Department of Homeland Security in California.
  • People who need legal help for immigration issues in California, upon appropriation by the Legislature.

Terms To Know

Tax Expenditures
Money that the government does not collect because of tax breaks or credits given to certain groups.
Immigration Legal Process
The process by which people seek legal status, protection, or other immigration-related services in the United States.

Limits and Unknowns

  • This bill only affects California corporations and does not change federal tax laws.
  • It is unclear how much extra revenue will be collected from these companies due to the new rules.
  • The bill requires a two-thirds majority vote in both houses of the Legislature to pass.

Bill History

  1. 2026-04-20 California Legislative Information

    In committee: Set, first hearing. Referred to REV. & TAX. suspense file.

  2. 2026-03-24 California Legislative Information

    Re-referred to Com. on REV. & TAX.

  3. 2026-03-23 California Legislative Information

    From committee chair, with author's amendments: Amend, and re-refer to Com. on REV. & TAX. Read second time and amended.

  4. 2026-03-23 California Legislative Information

    Referred to Com. on REV. & TAX.

  5. 2026-02-03 California Legislative Information

    From printer. May be heard in committee March 5.

  6. 2026-02-02 California Legislative Information

    Read first time. To print.

Official Summary Text

AB 1675, as amended, Lee.
Corporation Tax Law: tax expenditures:
No Tax Breaks for ICE Contractors Act of 2026.
Existing law, the
Personal Income
Corporation
Tax Law, imposes taxes based upon gross income, and defines “gross income” as all income from whatever source derived, unless specifically excluded.
Existing law allows various credits against the taxes imposed by that law.
The
Personal Income
Corporation
Tax Law conforms to federal law in its treatment of certain
exclusions.
exclusions and credits.
Existing law provides for certain programs for free legal services for indigent persons.
This bill
would state the intent of the Legislature to enact future legislation known as the No Tax Breaks for ICE Contractors Act of 2026 that would, among other things, commencing with tax year 2027, prohibit a corporation that contracts with the United States Department of Homeland Security for goods or services from being eligible to pay employees on a pretax basis for the employer pension contributions exclusion, require revenue savings be directed toward legal services for people
in the federal immigration legal process, and deem the act inoperative for any single tax year upon specified determinations by the Governor and Attorney General.
would, for taxable years beginning on or after January 1, 2027, and before January 1, 2032, enact the No Tax Breaks for ICE Contractors Act of 2026, which would deny all tax expenditures, as defined, otherwise available under the Corporation Tax Law to any taxpayer that contracts with United States Department of Homeland Security, as provided. The bill would establish the California Immigrant Resilience Fund in the State Treasury. The bill would require the Franchise Tax Board, in consultation with the Department of Finance, to estimate the amount of additional revenue resulting from the provisions of the bill, notify the Controller of that amount, and require the Controller to transfer that amount to the fund. The bill would make moneys in the fund available
to provide immigration-related services, including removal defense, as provided, upon appropriation by the Legislature.
This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of
2
/
3
of the membership of each house of the Legislature.
This bill would take effect immediately as a tax levy.

Current Bill Text

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