Imposes gross income tax at rate of 100 percent on amounts received by resident taxpayers from Anti-Weaponization Fund.

S4405

SENATE, No. 4405

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED JUNE 4, 2026

Sponsored by:

Senator� ANDREW ZWICKER

District 16 (Hunterdon, Mercer, Middlesex and Somerset)

Senator� RAJ MUKHERJI

District 32 (Hudson)

Co-Sponsored by:

Senator Gopal

SYNOPSIS

���� Imposes gross income tax at rate of 100 percent on
amounts received by resident taxpayers from Anti-Weaponization Fund.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning the taxation of monies received from the
Anti-Weaponization Fund, and supplementing Title 54A of the New Jersey
Statutes.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.� a.� As used in this
section, �Anti-Weaponization Fund� means the fund established by the Attorney
General of the United States pursuant to the settlement agreement in the
federal civil case
Donald J. Trump v. Internal Revenue Service
, No.
1:26-cv-20609-KMW (S.D. Fla.).

���� b.��� Notwithstanding any
provision of the �New Jersey Gross Income Tax Act,� N.J.S.54A:1-1 et seq., to
the contrary, including, but not limited to, the rates of tax set forth in
N.J.S.54A:2-1, all monies received by a resident taxpayer during a taxable year
from the Anti-Weaponization Fund shall be considered taxable income and shall
be subject to tax at the rate of 100 percent.

���� c.���� Notwithstanding any
provision of law to the contrary, no deductions, exemptions, or exclusions
shall be allowed against the income taxable pursuant to this section, and no
credits shall be allowed against the tax liability computed pursuant to this
section.

���� d.��� The filing, payment,
collection, and enforcement of the tax shall be administered pursuant to the
provisions of the �New Jersey Gross Income Tax Act,� N.J.S.54A:1-1 et seq., and
all powers and authority of the Director of the Division of Taxation in the Department
of the Treasury established thereunder shall apply to the tax imposed pursuant
to this section.

���� 2.� This act shall take effect
immediately and apply to taxable years beginning on or after January 1, 2026.

STATEMENT

���� This bill provides that all
monies received by a State resident from the Anti-Weaponization Fund would be
subject to gross income tax at the rate of 100 percent.� The bill also provides
that no deductions, exemptions, exclusions, or tax credits may be claimed
against the tax imposed on these monies.

���� The Anti-Weaponization Fund
was established by the Attorney General of the United States pursuant to a May
2026 settlement agreement in the federal civil case
Donald J. Trump v.
Internal Revenue Service
, No. 1:26-cv-20609-KMW (S.D. Fla.).� The
Anti-Weaponization Fund is set to receive $1.776 billion from the federal
Judgment Fund.� Under the settlement agreement, the monies in the
Anti-Weaponization Fund will be awarded by the federal Department of Justice to
approved claimants who are alleged to have been victims of �lawfare and
weaponization� by the federal government.� According to the settlement
agreement, well-known examples of �lawfare and weaponization� are alleged to
include the Biden Administration's �abuse� of the Freedom of Access to Clinic
Entrances Act, the Biden Administration's �wrongful labeling� of certain
persons as domestic terrorists, and the Internal Revenue Service�s �targeting�
of groups based on ideological criteria.� Given the subjective nature of these
determinations, the fund has been widely described as a �slush fund� for the
Trump Administration�s political allies, including those who were indicted or
convicted for offenses related to the January 6, 2021 attack on the United
States Capitol.

���� The settlement agreement makes
clear that �[t]he recipient of any relief from The Anti-Weaponization Fund will
have sole responsibility to comply with their own applicable federal, state,
and local tax requirements that arise as a result of this Settlement Agreement
and any relief from The Anti-Weaponization Fund.�� The federal government
therefore acknowledges that the State of New Jersey is fully within its
sovereign taxing power to impose the tax proposed under this bill, and the
recipients of claims from the fund will be fully responsible for the State tax
imposed on these monies.