New Jersey Pauses AI Data Center Tax Break Program Amid Public Pushback
New Jersey has paused applications for a state tax credit program for AI data centers, following inquiries from NBC New York's I-Team and public sentiment against such incentives. The pause affects the remaining $250 million in credits under the "Next New Jersey Program – AI" and targets a specific project by CoreWeave in Kennallorth. A state assemblyman has also proposed legislation to reclaim these tax credits, while industry groups argue for their necessity.
The state of New Jersey is temporarily suspending applications for a $4 billion tax incentive program aimed at AI data centers. This decision comes after NBC New York's I-Team questioned Governor Mikie Sherrill about her support for a specific $250 million tax credit package benefiting CoreWeave, an AI company planning a hyperscale data center in Kennallorth.
The New Jersey Economic Development Authority (NJEDA) announced a review of the "Next New Jersey Program – AI," leading to the pause in accepting new applications for the remaining $250 million in tax credits. State Assemblyman Andrew McCertie, reflecting community sentiment that data centers benefit more from the state than vice versa, has already proposed a bill to reclaim the $250 million in data center tax credits that the state just paused.
Conversely, the Data Center Coalition, an industry advocacy group, argues that tax incentives are crucial for attracting "futureproof jobs" and underpin the modern digital economy. They highlight that data centers support essential services, including streaming, online gaming, virtual communication, emergency services, telehealth, and financial transactions.