Bill Text: NJ A5336 | 2026-2027 | Regular Session | Comm Sub
Bill Title: Establishes surtax on certain incomes derived from operation of prediction markets.
Sponsorship: Partisan Bill (Democrat 5)
Status: (Introduced) 2026-06-28 - Reported from Assembly Comm. as a Substitute, 2nd Reading [A5336 Detail]
Download: New_Jersey-2026-A5336-Comm_Sub.html
ASSEMBLY COMMITTEE SUBSTITUTE FOR
ASSEMBLY, No. 5336
STATE OF NEW JERSEY
222nd LEGISLATURE
ADOPTED JUNE 28, 2026
Sponsored by:
Assemblyman CRAIG J. COUGHLIN
District 19 (Middlesex)
Assemblywoman LINDA S. CARTER
District 22 (Somerset and Union)
Assemblyman WILLIAM F. MOEN, JR.
District 5 (Camden and Gloucester)
Assemblywoman ELIANA PINTOR MARIN
District 29 (Essex and Hudson)
SYNOPSIS
Establishes surtax on certain incomes derived from operation of prediction markets.
CURRENT VERSION OF TEXT
Substitute as adopted by the Assembly Budget Committee.
An Act concerning a surtax on certain incomes derived from the operation of prediction markets and supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and N.J.S.54A:1-1 et seq.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. In addition to the tax paid by each prediction market operator determined pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), each prediction market operator, for privilege periods beginning on and after July 1, 2025, shall be assessed and shall pay a surtax of 9 percent on allocated taxable net income. The surtax shall be due and payable in accordance with section 15 of P.L.1945, c.162 (C.54:10A-15), and the surtax shall be administered pursuant to the provisions of P.L.1945, c.162 (C.54:10A-1 et seq.). Notwithstanding the provisions of any other law to the contrary, no credits shall be allowed against the surtax liability computed under this section except for credits for installment payments, estimated payments made with a request for an extension of time for filing a return, or overpayments from prior privilege periods.
b. For purposes of this section:
"Allocated taxable net income" shall mean taxable net income as defined in subsection (w) of section 4 of P.L.1945, c.162 (C.54:10A-4).
"Bid-ask format" means a format in which parties submit offers to buy positions at a specific price or range of prices and offers to sell positions at a specific price or range of prices, with market prices determined through the matching of these offers.
"Combined group" shall mean a combined group as defined in subsection (z) of section 4 of P.L.1945, c.162 (C.54:10A-4).
"Future events" means the outcome or occurrence of: a federal, state, or local election; events in popular culture, including but not limited to awards and the date a piece of entertainment will be released; an athletic event or game of skill, or portions thereof or individual performance statistics therein; any game played with cards, dice, equipment, or any mechanical or electronic device machine; or legal actions, including but not limited to a civil or criminal suit, grand jury proceeding, jury trial, settlement, plea deal, or conviction.
"Prediction market" means any physical or electronic system that allows participants to open a speculative position on the outcome of future events, in a bid-ask format, and in any other form regardless of the mechanisms or structures used for opening speculative positions on future events.
"Prediction market operator" means a board of trade or other person, including any affiliate of the person, that operates a prediction market, including but not limited to, a person that owns, operates, or controls a digital distribution service, digital distribution platform, online portal, or application store where a prediction market may be accessed. A prediction market operator includes any business entity or combined group that is subject to tax as provided in the Corporation Business Tax Act (1945), P.L.1945, c.162 (C.54:10A-1 et seq).
"Speculative position" means a financial commitment made by a participant in a prediction market.
2. a. In addition to the tax paid by a taxpayer from income derived from the operation of a prediction market operator under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., each taxpayer, for taxable years beginning on and after January 1, 2026, shall be assessed and shall pay a surtax of 9 percent on the gross income received during the taxpayer's taxable year derived from the operation of a prediction market operator. The surtax shall be due and payable in accordance chapter 8 of Title 54A of the Revised Statutes, and the surtax shall be administered pursuant to the provisions of the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. Notwithstanding the provisions of any other law to the contrary, no credits shall be allowed against the surtax liability computed under this section except for credits for installment payments, estimated payments made with a request for an extension of time for filing a return, or overpayments from prior taxable years.
b. For purposes of this section:
"Bid-ask format" means a format in which parties submit offers to buy positions at a specific price or range of prices and offers to sell positions at a specific price or range of prices, with market prices determined through the matching of these offers.
"Future events" means the outcome or occurrence of: a federal, state, or local election; events in popular culture, including but not limited to awards and the date a piece of entertainment will be released; an athletic event or game of skill, or portions thereof or individual performance statistics therein; any game played with cards, dice, equipment, or any mechanical or electronic device machine; or legal actions, including but not limited to a civil or criminal suit, grand jury proceeding, jury trial, settlement, plea deal, or conviction.
"Prediction market" means any physical or electronic system that allows participants to open a speculative position on the outcome of future events, in a bid-ask format, and in any other form regardless of the mechanisms or structures used for opening speculative positions on future events.
"Prediction market operator" means a board of trade or other person, including any affiliate of the person, that operates a prediction market, including but not limited to, a person that owns, operates, or controls a digital distribution service, digital distribution platform, online portal, or application store where a prediction market may be accessed. A prediction market operator includes a person or business entity that is subject to tax under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. For a prediction market operator that is an S corporation or an entity classified as a partnership for federal income tax purposes, the surtax imposed under this section shall apply to each shareholder's net pro rata share or partner's distributive share of income derived from the operation of the prediction market operator.
"Speculative position" means a financial commitment made by a participant in a prediction market.
3. This act shall take effect immediately and section 1 shall be effective for privilege periods beginning on and after July 1, 2025, and section 2 shall be effective for taxable years beginning on and after January 1, 2026.
