TRENTON, N.J. — The New Jersey General Assembly has approved legislation that would eliminate $250 million in uncommitted tax credits previously authorized for certain artificial intelligence and data center development projects.
Sponsored by Assembly members Andrew Macurdy, Balvir Singh and Annette Quijano, Bill A5165, known as the “End Data Center Tax Credits Act,” would reduce the amount of tax credits available under the state’s Next New Jersey Program by the remaining balance reserved for AI and data center projects.
The proposal leaves intact the $250 million in tax credits that had already been awarded as of May 2026 but eliminates the remaining uncommitted funding.
“In 2026, with the AI industry among the most profitable in the world and its demand for enormous amounts of electricity driving up costs for residents, these corporate tax credits are no longer the best use of our taxpayer resources. This bill, as amended, would therefore end the tax credit program and save $250 million in taxpayer money,” said Assemblyman Macurdy, D-Middlesex, Morris, Somerset and Union. “This legislation is a responsible step that would promote greater accountability in how economic development incentives are used.”
The Economic Recovery Act of 2020 authorized up to $500 million in tax credits through the Next New Jersey Program for qualifying artificial intelligence and data center projects. According to the bill’s sponsors, half of that funding has already been committed and would not be affected by the legislation.
“AI data centers, backed by some of the wealthiest corporations and investors in the world, do not need additional subsidies on the backs of New Jersey taxpayers,” said Assemblyman Singh, D-Burlington. “At a time when New Jersey families are struggling with rising electric bills, groceries, and the cost of everyday essentials, public dollars should be focused on providing relief to residents and investing in the infrastructure needed for a reliable and affordable energy future, not enriching billionaires.”
Assemblywoman Quijano said the legislation reflects the need to reevaluate economic incentives as conditions change.
“Residents expect us to be good stewards of public resources,” said Quijano, D-Union. “By ending these uncommitted tax credits, we are strengthening oversight of economic development programs and ensuring that incentives are reviewed and adjusted when circumstances change.”
The bill now advances for further consideration in the legislative process.
