New Jersey’s Governor Phil Murphy has signed Bill S3432/A4558, which introduces the Next New Jersey Program on 25 July 2024.
The Next New Jersey Program is aimed at attracting fresh investments into the state’s artificial intelligence (AI) sector and will be administered by the New Jersey Economic Development Authority (NJEDA). This program will provide tax credits to qualifying businesses involved in AI development or operating large-scale AI data centers.
Under the program, the NJEDA would provide tax credits to eligible businesses, following approval of an application by the EDA, to eligible AI businesses. Eligible AI businesses would include a business or division that is primarily engaged in the artificial intelligence industry or large-scale artificial intelligence data center industry.
A business would be considered primarily engaged in such an industry if:
- at least 50% of the business’s employees are engaged in AI-related activities; or,
- at least 50% of the business’s revenue is generated from AI-related activities.
Under the bill, the amount of the tax credit allowed for a particular project would equal to the lesser of:
- the product of 0.1% of the eligible business’s total capital investment multiplied by the number of new full-time jobs;
- 25% of the eligible business’s total capital investment; or
- USD 250 million.
The bill provides that up to USD 500 million in tax credits, originally allocated for the New Jersey Aspire Program and the Emerge Program, be made available to eligible AI businesses under the Next New Jersey Program.
Additionally, the bill provides that if the NJEDA awards less than the annual limitation of tax credits under the New Jersey Aspire Program and the Emerge Program, then the uncommitted credits would also be made available to eligible AI businesses under the Next New Jersey Program.
