Newsom signs 100% California tax on Trump ally fund payouts
California has approved a 100% state tax on payments from the federal Anti-Weaponization Fund or similar future settlements. The rule would affect California residents, but the federal fund remains blocked in court.
Gov. Gavin Newsom signed Senate Bill 122 with a provision that would take the full amount, through California tax, of any payout a resident receives from the federal Anti-Weaponization Fund or a later related settlement. The rule covers tax years 2026 through 2030, but the federal fund is still blocked in court.
The fund was created by the Trump Justice Department to compensate allies who claimed they were targeted under the Biden Justice Department. USC tax law professor Ariel Jurow Kleiman described California's approach as unusual but said states generally have broad room to define taxable income.