Macurdy Bill Ends $250 Million in AI Data Center Tax Credits

Legislation sponsored by Summit resident and state Assemblyman Andrew Macurdy, a Democrat representing New Jersey's 21st Legislative District, eliminating $250 million in uncommitted tax incentives for artificial intelligence data centers has been signed into law. Gov. Mikie Sherrill signed the "End Data Center Tax Credits Act," A5165/S4390, on Thursday, according to the Governor's Office. State legislative action eliminated remaining AI data center tax credit availability.

Legislative History and Voting Record

State legislative records show the bill passed both houses on June 30. The Senate approved it 35-4 before the Assembly voted 74-4 in favor. Overwhelming legislative support reflected bipartisan concern about AI data center tax incentives.

Assemblyman Macurdy's Statement

"Our role as elected officials is to continually scrutinize whether taxpayer dollars are being used as effectively as possible," Macurdy said in a statement after the bill was signed. "In 2026, New Jersey residents should not be subsidizing large AI data centers." Macurdy's statement emphasized fiscal accountability and taxpayer protection.

Union County Life covers state legislation, economic development policy, and local news serving Union County residents across all 21 municipalities.

Summit Data Center Ban and Policy Context

The signing follows Summit's decision to prohibit AI data center facilities throughout the city. The Common Council adopted its initial ban June 16, with an ordinance that included a 20-megawatt power threshold in its definition of an AI data center. The threshold prompted concerns about whether smaller facilities could escape the prohibition.

Council adopted a follow-up ordinance July 28 that removed the threshold and clarified the citywide ban. Clarified ordinance closed potential loopholes and established comprehensive ban.

New Jersey Tax Credit Program and Funding

New Jersey established its Next New Jersey tax-credit program in 2024, reserving $500 million for qualifying artificial intelligence and data center projects. The New Jersey Economic Development Authority awarded the first $250 million to CoreWeave. State investment commitment reflected initial support for data center development.

Kenilworth AI Data Center Project

NJEDA records show CoreWeave company plans to develop a $1.8 billion AI data center at the former Merck campus in Kenilworth. The Kenilworth facility represents major economic development project in Union County, utilizing former industrial campus for technology infrastructure.

Law Implementation and CoreWeave Impact

The law leaves CoreWeave's award intact but eliminates the remaining incentives. Existing awards protected while future incentive availability eliminated. CoreWeave's $250 million award remains valid despite policy shift.

State Economic Policy and Data Center Regulation

The move drew opposition from the New Jersey Business and Industry Association and will not generate new state revenue, according to the state Office of Legislative Services and NJBIA. Opposition reflected business sector concerns about reduced incentive availability for future data center projects.

Tax Credit and Economic Development Trade-offs

State tax credit elimination represents policy prioritization of fiscal responsibility over data center incentive subsidization. Decision balances economic development goals with taxpayer cost management.

AI Infrastructure and Technology Development

AI data centers represent growing technology infrastructure sector. State policy decisions affect technology investment patterns and regional economic development.

Municipal Authority and Local Data Center Regulation

Summit's AI data center ban reflects municipal authority to regulate land use and facility development. Local ordinances establish clear community standards for technology infrastructure.

For Union County Residents and Kenilworth Community

Union County residents and Kenilworth community members should be aware of CoreWeave facility development at former Merck campus. State tax credit elimination affects incentive landscape but does not eliminate CoreWeave's existing $250 million award.

State policy change demonstrates continued focus on AI data center regulation and taxpayer protection through legislative action.

Find more state legislation, economic development policy, and local news serving Union County residents on Union County Life.

Photo Credit: New Jersey Globe

FAQ

Q: What did the bill signed by Governor Sherrill do?
A: The "End Data Center Tax Credits Act" eliminated $250 million in uncommitted tax incentives for AI data centers in New Jersey under the Next New Jersey tax-credit program.

Q: How much tax incentive money was eliminated?
A: $250 million in uncommitted (future) tax incentives was eliminated. The $250 million already awarded to CoreWeave was protected under the law.

Q: Who sponsored the bill?
A: State Assemblyman Andrew Macurdy of Summit, a Democrat representing New Jersey's 21st Legislative District, sponsored the legislation.

Q: How did the Legislature vote?
A: The Senate approved the bill 35-4. The Assembly voted 74-4 in favor. Both houses passed it on June 30.

Q: What is the Next New Jersey tax-credit program?
A: It is a state program established in 2024 that reserved $500 million for qualifying AI and data center projects.

Q: What happened to CoreWeave's award?
A: CoreWeave's existing $250 million award was protected and remains intact. The company plans a $1.8 billion AI data center at the former Merck campus in Kenilworth.

Q: Why did the Legislature eliminate these tax credits?
A: Assemblyman Macurdy stated concerns about using taxpayer dollars to subsidize large AI data centers, and emphasized scrutiny of tax incentive effectiveness.

Q: Did any opponents exist?
A: Yes. The New Jersey Business and Industry Association opposed the measure, citing concerns about reduced incentive availability.