This bill proposes that all funds received by resident taxpayers from the Anti-Weaponization Fund will be subject to a gross income tax at a rate of 100 percent. It specifies that no deductions, exemptions, or tax credits can be claimed against this tax. The Anti-Weaponization Fund, established by the Attorney General of the United States as part of a settlement agreement in the federal civil case Donald J. Trump v. Internal Revenue Service, is set to receive $1.776 billion from the federal Judgment Fund. The funds are intended for claimants who allege victimization by the federal government through lawfare and weaponization, with the bill suggesting that the fund may be used to benefit political allies of the Trump Administration.

Additionally, the bill clarifies that recipients of the Anti-Weaponization Fund will be responsible for complying with their tax obligations at the federal, state, and local levels. The federal government acknowledges New Jersey's authority to impose this tax, reinforcing the state's sovereign taxing power. The bill is set to take effect immediately and will apply to taxable years beginning on or after January 1, 2026.