Overview
- The governor signed the bill on Tuesday, June 30, 2026, fast-tracked as SB 122 and written to levy a 100 percent California income tax on any distributions tied to the Justice Department’s proposed fund.
- The tax applies to California tax years 2026 through 2030 and only affects state tax treatment of those payments rather than blocking any federal action to create or distribute the fund.
- A federal court in Virginia has temporarily blocked the fund, so no payments have been made and the state tax will only take effect if distributions occur.
- Legal scholars call the move a novel strategy but note states have broad power to define taxable income, and any court challenge would likely require a recipient to pay the tax first to establish legal standing.
- Coverage split reflects politics: California’s Democratic leaders frame the law as preventing taxpayer subsidies for those tied to the Jan. 6 attack, while conservative outlets and commentators call the measure unconstitutional and predict legal fights.