California Governor Gavin Newsom today signed legislation imposing a 100% state tax on distributions from President Donald Trump's proposed $1.776 billion fund, which aims to benefit individuals connected to the January 6 attack on the U.S. Capitol. This new law ensures California will not provide tax benefits for payments made to those convicted of crimes related to the assault.\n\nGovernor Newsom said, "Donald Trump wants taxpayers to reward people who assaulted police officers and tried to overturn an American election. California rejects politics of grievance, extremism, and violence. We believe democracy is worth defending, the rule of law matters, and public dollars should support victims—not those who attacked the very institutions that protect our freedoms."\n\nThe legislation, SB 122, reinforces California's commitment to democratic institutions and crime victims, preventing taxpayer resources from rewarding criminal conduct. Assemblymember Jesse Gabriel said, “California is drawing a clear line: there will be no windfall for anyone who has engaged in corruption or attacked our democracy."\n\nState Senator John Laird added that California has the authority to determine how payments are treated under its tax laws, stating, "If the federal government chooses to create a special compensation fund, California isn’t required to provide a state tax benefit for those payments." Although a federal judge temporarily blocked the fund's implementation, the U.S. Department of Justice remains confident in its legality.\n\nBy enacting this law, California ensures that if Trump's fund proceeds, recipients will not receive favorable state tax treatment. The state emphasizes its dedication to public safety and supporting victims, contrasting with federal actions that have reduced grants for victims of various crimes.
