AI Tax and Work Protection Act (H.R.10044) — a tax on AI token usage whose rate moves with the unemployment rate, with the whole yield going to a trust fund
A House bill imposing a tax on artificial intelligence token usage and directing the whole yield to a trust fund. The rate moves with unemployment: 2 percent at or below 5 percent, plus the excess between 5 and 7 percent, plus twice the excess above 7 percent. An Office of Job Creation at the Department of Labor makes grants to state, local and tribal governments and public schools to create jobs.
Bill overview (primary data)
- Bill numberH.R. 10044
- TypeHouse Bill
- Congress119th Congress
- Latest actionReferred to the Committee on Education and Workforce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.（2026-08-06）
Key points
- Taxes AI token usage with a rate tied to unemployment: 2 percent at or below 5 percent, plus the excess to 7, plus twice the excess above.
- The amount taxed is the greater of a token-value calculation and a consideration-based calculation.
- Higher rates may be suspended where unemployment above 5 percent is determined to come from a shock unrelated to AI.
- An amount equivalent to 100 percent of the tax goes into a trust fund, and an Office of Job Creation is placed at the Department of Labor.
- Jobs created under the grants carry conditions including leave earned at one hour per 30 hours worked, up to 56 hours a year.
- The rate moves with unemployment: 2 percent at or below 5, and 2 percent plus twice the excess above 7.
1The rate moves with unemployment
At the centre of this bill is a rate that does not stand still. Where the applicable unemployment rate is at or below 5 percent the token rate is 2 percent; between 5 and 7 percent it is 2 percent plus the excess; above 7 percent it is 2 percent plus twice the excess. The transaction-based rate follows the same structure from 3 percent.
The design makes the tax heavier as employment is lost, tying the effect of AI adoption on employment to a single number. Where a rise above 5 percent is determined to come from a war, pandemic or other shock unrelated to AI, the higher rates may be suspended, leaving the separation of cause to the Secretary judgment.
2Tokens as the base of the tax
What sits at the base is the fair market value of tokens processed. A token is the unit used to measure the volume of what a model takes in or puts out, so the tax attaches to usage itself.
Alongside it runs a calculation based on the consideration received for AI services, and the greater of the two is taxed. Either alone would leave room to avoid the tax through how prices are set. Running both captures the activity from volume and from money alike.
3Where the money goes
An amount equivalent to 100 percent of the tax goes into a trust fund. An Office of Job Creation is placed at the Department of Labor, and a grant programme has state governments, local governments, tribal governments, publicly funded schools and educational agencies create jobs.
Jobs created under the grants carry conditions, among them paid leave and leave earned at one hour per 30 hours worked up to 56 hours a year. Collecting the tax and spending it sit inside one bill. Of the 114 AI-related bills this site holds as of 2026-09-01, among the 44 not yet covered, this is the only one whose title begins with impose.
4The rate moves with unemployment
The centre of this bill is that the rate is not fixed. Bands are set according to the applicable unemployment rate.
| Applicable unemployment rate | Rate on the token basis |
|---|---|
| 5 percent or below | 2 percent |
| Above 5 and up to 7 percent | 2 percent plus the excess |
| Above 7 percent | 2 percent plus twice the excess |
The transaction-based rate follows the same structure, starting at 3 percent. The design makes the tax heavier as employment is lost, tying the effect of AI adoption on jobs to a single number. Where a rise in unemployment is judged to come from a shock unrelated to AI, such as war or a pandemic, the higher rate can be suspended — leaving the separation of cause to the Secretary's judgement.
Why it matters
Taxing usage itself narrows the room to avoid tax through pricing while raising the question of how volume is verified. Tying the rate to unemployment builds a policy aim into the tax code. For a provider of AI services, records of token volume would take on tax significance.
FAQ
What is a token?
Why tie the rate to unemployment?
Where does the money go?
Sources (primary)
Source: Congress.gov (Library of Congress; U.S. legislative materials, public domain). Links go to the official site.
- Congress.gov (bill page, original)
- H.R. 10044（119th Congress）