Assembly panel approves returning AI data centers tax credits
A bill to repeal $250 million in unused tax incentives for AI data centers was unanimously approved by the New Jersey Assembly Budget Committee, moving closer to final passage. The legislation reflects growing bipartisan concern and fierce public opposition over data center development due to issues like noise, energy consumption, and environmental impacts. Governor Mikie Sherrill has also proposed new guardrails for the rapidly expanding industry.
A bill known as the End Data Center Tax Credits Act (A5165), which seeks to repeal $250 million in unused tax incentives for AI data centers, has advanced further towards final passage in New Jersey. The measure was unanimously approved by the Assembly Budget Committee on Sunday, reflecting increasing bipartisan concerns over the data center industry.
The legislation, sponsored by Assemblymen Andrew Macurdy (D-Summit) and Balvir Singh (D-Burlington), aims to return the tax credits to the New Jersey Economic Development Authority. It comes in response to growing contention surrounding data center development across the state, with residents and local officials expressing concerns about noise, high energy consumption, and environmental impacts.
Specific examples highlighted in the article include complaints from Vineland residents about persistent humming noises attributed to a nearby data center, and the derailment of a proposed facility in Andover after its borough council voted to reject the project. This public backlash has garnered bipartisan support for discontinuing the tax incentives.
The bill has previously cleared the Assembly State and Local Government Committee and the Senate Budget and Appropriations Committee. Governor Mikie Sherrill has also weighed in, proposing new guardrails for AI data center development as lawmakers continue to scrutinize the industry's rapid expansion ahead of the June 30 budget deadline.