Legislature votes to eliminate $250 million in AI data center tax credits

Assemblyman Andrew Macurdy (D-Summit) hailed the overwhelming bipartisan support for legislation eliminating $250 million in uncommitted tax credits for artificial intelligence and data center projects after the General Assembly approved the measure by a 74-4 vote on June 30.

The bill, designated S4390 in the Senate was and A5165 in the Assembly, passed the Senate on Thursday with near-unanimous support and now heads to the governor’s desk.

The four Assembly members voting against the measure were Brian Bergen (R-Denville), John DiMaio (R-Hackettstown), Kevin Egan (D-New Brunswick), and Aura Dunn (R-Mendham). Alex Sauickie (R-Jackson) and Mitchelle Drulis (D-Raritan Township) did not vote.

Macurdy credited fellow Assembly sponsors Balvir Singh (D-Burlington) and Annette Quijano (D-Elizabeth), along with legislative leaders, for moving the bill through the Legislature at an unusually rapid pace. Introduced on June 1, the measure cleared both houses less than a month later.

“I commend Speaker Coughlin for recognizing this bill and giving it a speedy review,” Macurdy said.

He also praised Senate President Nicholas Scutari and State Sen Joseph Cryan (D-Union), the prime sponsors of the Senate version.

“AI data centers are no longer the best use of state resources,” Macurdy said.

The bill redirects $250 million in uncommitted tax credits previously reserved for AI and data center construction to other economic development priorities under the Next New Jersey Program.

Singh said the state should prioritize taxpayers over large technology companies.

“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,” Singh said. “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.”

The legislation, known as the “End Data Center Tax Credits Act,” eliminates the remaining uncommitted balance of tax credits that had been set aside for qualifying AI and data center projects under the Next New Jersey Program.

Data centers have become an increasingly contentious issue in New Jersey and nationwide as policymakers balance their economic development potential against concerns over electricity demand, water consumption, strain on local infrastructure, and the impact on utility rates.

In New Jersey, opposition to new data center development has emerged in communities represented by both Democrats and Republicans, giving the legislation unusually broad bipartisan support despite the national debate over artificial intelligence infrastructure.