franchise tax credit for on-site employee child care

The text as introduced · 715 words

89R1401 SRA-D

By: West
S.B. No. 211

A BILL TO BE ENTITLED

AN ACT

relating to a franchise tax credit for taxable entities that

operate an on-site child-care center for use by the entity's

employees.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 171, Tax Code, is amended by adding

Subchapter O-1 to read as follows:

SUBCHAPTER O-1. TAX CREDIT FOR OPERATION OF ON-SITE CHILD-CARE

CENTERS

Sec. 171.781. DEFINITIONS. In this subchapter:

(1) "Employee" means an individual who performs

services for an employer for compensation under an oral or written

contract of hire, whether express or implied. The term does not

include an independent contractor.

(2) "Licensed child-care center" means a child-care

center licensed, certified, or registered by the Department of

Family and Protective Services to provide assessment, care,

training, education, custody, treatment, or supervision for a child

who is not related by blood, marriage, or adoption to the owner or

operator of the center, for all or part of the 24-hour day, whether

or not the center is operated for profit or charges for the services

it offers.

Sec. 171.782. ENTITLEMENT TO CREDIT. A taxable entity is

entitled to a credit in the amount and under the conditions provided

by this subchapter against the tax imposed under this chapter.

Sec. 171.783. QUALIFICATION. A taxable entity qualifies

for a credit under this subchapter if the taxable entity

establishes and operates a licensed child-care center that is:

(1) available exclusively to the employees of the

entity for the purpose of providing care for the employees'

children and dependents; and

(2) located at or immediately adjacent to the site at

which the employees using the center work.

Sec. 171.784. AMOUNT OF CREDIT; LIMITATIONS. (a) Subject

to Subsection (c), the amount of the credit a taxable entity may

claim on a report is equal to:

(1) 30 percent of the entity's net cost to operate the

licensed child-care center during the period on which the report is

based; or

(2) if the licensed child-care center is certified as

a provider in the Texas Rising Star Program, 35 percent of the

entity's net cost to operate the licensed child-care center during

the period on which the report is based.

(b) Notwithstanding Subsection (a) and subject to

Subsection (c), the amount of the credit a taxable entity may claim

on the first report due after the date the entity first opens the

licensed child-care center is equal to 20 percent of the total

amount spent by the entity to construct the center and prepare the

center for initial operation.

(c) The total amount of credit claimed by a taxable entity

on a report may not exceed the lesser of:

(1) the amount of franchise tax due for the report

after the application of any other applicable credits; or

(2) the amount from the following list that applies to

the report:

(A) $100,000 if the total amount of franchise tax

due for the report is $3 million or less after applying all other

applicable credits;

(B) $250,000 if the total amount of franchise tax

due for the report is more than $3 million but less than $10 million

after applying all other applicable credits; or

(C) $500,000 if the total amount of franchise tax

due for the report is $10 million or more after applying all other

applicable credits.

Sec. 171.785. APPLICATION FOR CREDIT. (a) A taxable entity

must apply for a credit under this subchapter on or with the report

for the period for which the credit is claimed.

(b) A taxable entity must apply for the credit in the manner

prescribed by the comptroller and include with the application any

information requested by the comptroller to determine whether the

entity is eligible for the credit under this subchapter.

Sec. 171.786. ASSIGNMENT PROHIBITED; EXEMPTION. A taxable

entity may not convey, assign, or transfer a credit under this

subchapter to another entity unless substantially all of the assets

of the taxable entity are conveyed, assigned, or transferred in the

same transaction.

Sec. 171.787. RULES. The comptroller shall adopt rules

necessary to implement and administer this subchapter.

SECTION 2. This Act applies only to a report originally due

on or after the effective date of this Act.

SECTION 3. This Act takes effect January 1, 2026.