AI Frontier Institute

Imposes 10 percent tax on computer processing for certain artificial intelligence systems and dedicates revenue to "AI Workforce Impact Transition Fund."

View primary source →

New Jersey S4712 (introduced Oct. 1, 2026, and referred to the Senate Economic Growth Committee) has not been enacted. If enacted, it would impose a 10 percent tax on the "value generated by AI computer processing" (section 2). The tax would apply to AI computer processors located in the State, and to processors performing processing for a qualified AI business engaged in AI system services. The processor pays the tax. Value is the market value of the tokens used. For contracted processors, it is tokens multiplied by the billing rate per token. For controlled processors (owned and operated by the AI business or its affiliates), it uses a method the Division of Taxation approves. For out-of-state processors, the tax is apportioned by the share of value tied to AI services used or intended for business uses in New Jersey. The Director of the Division of Taxation would collect the tax quarterly under existing tax law. Section 3 requires both processors and qualified AI businesses to keep detailed records and submit them to the Division. Section 4 creates a dedicated, non-lapsing "AI Workforce Impact Transition Fund" in the Department of Labor and Workforce Development, managed and invested by the State Treasurer. The tax revenue goes into it. Subject to legislative appropriation, the fund pays for career-transition and training support for "displaced workers," meaning people whose jobs ended or are expected to become obsolete within 12 months because of AI. It also pays for grants to qualified organizations and for student support services and dual enrollment programs in public high schools. Administrative costs are capped at 10 percent of annual deposits, with a start-up exception, and State Employment and Training Commission costs are capped at 0.5 percent. The Commission would evaluate the training services each year, and the Commissioner would file an annual report with the Governor and Legislature. Section 5 directs rulemaking by the Division and the Department. Section 6 makes the act effective the January 1 after enactment, with anticipatory action allowed.

← Back to the tracker