This bill proposes a gross income tax at a rate of 100 percent on all amounts received by resident taxpayers from the Anti-Weaponization Fund, which was 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. The bill stipulates that these funds will be considered taxable income, and no deductions, exemptions, or tax credits will be allowed against this tax liability. The administration of this tax will follow the provisions of the New Jersey Gross Income Tax Act.

The Anti-Weaponization Fund is set to receive $1.776 billion from the federal Judgment Fund and is intended to compensate individuals who claim to be victims of government overreach, particularly in relation to actions taken by the Biden Administration. The bill emphasizes that recipients of the fund will be responsible for complying with their tax obligations, affirming New Jersey's authority to impose this tax. The act is set to take effect immediately and will apply to taxable years beginning on or after January 1, 2026.