New Jersey Lawmakers Just Nixed a 2-Year-Old Data Center Tax Credit
New Jersey lawmakers have passed a bill to eliminate a 2-year-old tax credit program for data centers, including a significant allocation for CoreWeave, in response to public outrage over rising electricity prices. The legislation awaits the governor's signature and reflects a national trend of states reconsidering data center incentives due to energy cost concerns.
New Jersey lawmakers have advanced a bill to scale back the two-year-old Next New Jersey data center tax credit program, a move prompted by public outcry over escalating electricity prices. The legislation, which includes measures to eliminate $250 million of the program's remaining funds, is now on Governor Mikie Sherrill's desk for signature. State Senator Joseph Cryan indicated that the primary driver for the bill was public outrage, particularly concerning a $250 million allocation previously granted to a CoreWeave data center project.
This legislative action in New Jersey mirrors a broader national trend where states are re-evaluating tax incentives for data centers. Virginia, for instance, recently passed a budget deal that includes a tax on data center electricity consumption, while postponing a decision on sales tax exemptions to a working group, partly due to opposition from State Senator Louise Lucas. Similarly, Illinois has paused its data center tax incentives, which had been valued at nearly $1 billion over five years.
The shift in sentiment is largely attributed to growing public scrutiny of data centers' perceived impact on electricity rates. Justin Balik, a former economic development official in New Jersey and now with Evergreen Action, highlighted a