86R23635 GRM-D
By: Hinojosa, Wray, Martinez Fischer, H.B. No. 52
Guillen, Cole
Substitute the following for H.B. No. 52:
By: Rodriguez C.S.H.B. No. 52
A BILL TO BE ENTITLED
AN ACT
relating to a franchise tax credit pilot program for taxable
entities that contribute to an employee dependent care flexible
spending account.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 171, Tax Code, is amended by adding
Subchapter P to read as follows:
SUBCHAPTER P. TAX CREDIT PILOT PROGRAM FOR EMPLOYER CONTRIBUTIONS
TO DEPENDENT CARE FLEXIBLE SPENDING ACCOUNTS
Sec. 171.801. DEFINITION. In this subchapter, "dependent
care flexible spending account" means a pretax benefit account used
to pay eligible dependent care services as authorized by the
Internal Revenue Code of 1986, as effective on January 1, 2019.
Sec. 171.802. 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. 171.803. QUALIFICATION. (a) Subject to Subsection
(b), a taxable entity qualifies for a credit under this subchapter
if the taxable entity:
(1) has an average of not more than 500 employees
during the period on which the report is based; and
(2) contributes to the dependent care flexible
spending account of each employee of the taxable entity who
maintains an account and receives from the taxable entity an annual
salary or wage of not more than $65,000.
(b) A combined group qualifies for a credit under this
subchapter in connection with any member of the combined group that
satisfies the requirements of Subsection (a).
Sec. 171.804. AMOUNT OF CREDIT; LIMITATIONS. (a) Subject
to Subsection (b), the amount of the credit for a report in
connection with each employee described by Section 171.803(a)(2) is
equal to the lesser of:
(1) 50 percent of the contributions made by the
taxable entity to the employee's dependent care flexible spending
account, excluding any portion of a contribution returned to the
taxable entity; or
(2) $2,500.
(b) The total amount of the credit for each report is equal
to the lesser of:
(1) the total of the credits allowed under Subsection
(a) for the reporting period for all employees; or
(2) the amount of franchise tax due after applying all
other applicable credits.
Sec. 171.805. APPLICATION FOR CREDIT. (a) A taxable entity
must apply for a credit under this subchapter on or with the tax
report for the period for which the credit is claimed.
(b) The comptroller shall promulgate a form for the
application for the credit. A taxable entity must use the form in
applying for the credit.
Sec. 171.806. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. A
taxable entity may claim a credit under this subchapter for a report
only in connection with contributions made during the accounting
period on which the report is based.
Sec. 171.807. DEPOSIT OF CERTAIN REVENUE. Notwithstanding
any other law, for each fiscal year, the comptroller must deposit to
the credit of the property tax relief fund an amount of revenue
received from the tax imposed under this chapter sufficient to
offset any decrease in deposits to that fund that results from the
implementation of this subchapter.
Sec. 171.808. EXPIRATION. This subchapter expires December
31, 2021.
SECTION 2. (a) Not later than September 1, 2022, the
comptroller shall prepare and deliver to the governor, the
lieutenant governor, the speaker of the house of representatives,
and the presiding officer of each legislative standing committee
with primary jurisdiction over taxation a report that evaluates the
effect of the pilot program established under Subchapter P, Chapter
171, Tax Code, as added by this Act, on employer contributions to
employees' dependent care flexible spending accounts for which
credits are granted under the pilot program under that subchapter.
The report must include a recommendation regarding whether the
credit allowed under the pilot program should be reestablished.
(b) A taxable entity that claims a credit under Subchapter
P, Chapter 171, Tax Code, as added by this Act, shall provide to the
comptroller information the comptroller requests to prepare the
report described by Subsection (a) of this section.
SECTION 3. A taxable entity may claim the credit under
Subchapter P, Chapter 171, Tax Code, as added by this Act, only for
contributions made on or after September 1, 2019, and before
January 1, 2022, and only on a franchise tax report originally due
under Chapter 171, Tax Code, on or after January 1, 2020, and before
January 1, 2023, notwithstanding the expiration of Subchapter P,
Chapter 171, Tax Code, as added by this Act.
SECTION 4. This Act takes effect September 1, 2019.