| 1 | 1 | | 88R14158 SRA-D |
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| 2 | 2 | | By: Bernal H.B. No. 4747 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to a franchise tax credit for taxable entities that |
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| 8 | 8 | | provide child care. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Chapter 171, Tax Code, is amended by adding |
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| 11 | 11 | | Subchapter N to read as follows: |
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| 12 | 12 | | SUBCHAPTER N. TAX CREDIT FOR PROVISION OF CHILD CARE |
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| 13 | 13 | | Sec. 171.701. DEFINITION. In this subchapter, "employee" |
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| 14 | 14 | | means an individual who performs services for an employer for |
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| 15 | 15 | | compensation under an oral or written contract of hire, whether |
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| 16 | 16 | | express or implied. The term does not include an independent |
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| 17 | 17 | | contractor. |
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| 18 | 18 | | Sec. 171.702. ENTITLEMENT TO CREDIT. A taxable entity is |
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| 19 | 19 | | entitled to a credit in the amount and under the conditions provided |
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| 20 | 20 | | by this subchapter against the tax imposed under this chapter. |
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| 21 | 21 | | Sec. 171.703. QUALIFICATION. A taxable entity qualifies |
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| 22 | 22 | | for a credit under this subchapter if the taxable entity subsidizes |
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| 23 | 23 | | all or a portion of the entity's employees' costs for child care at: |
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| 24 | 24 | | (1) a licensed child-care center operated by the |
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| 25 | 25 | | entity; or |
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| 26 | 26 | | (2) a licensed commercial or home-based child-care |
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| 27 | 27 | | center. |
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| 28 | 28 | | Sec. 171.704. AMOUNT OF CREDIT. The amount of a taxable |
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| 29 | 29 | | entity's credit for a report is equal to the lesser of: |
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| 30 | 30 | | (1) the amount of the costs attributable to |
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| 31 | 31 | | subsidizing employee child care in the manner described by Section |
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| 32 | 32 | | 171.703 during the period on which the report is based; or |
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| 33 | 33 | | (2) the amount equal to one percent of the franchise |
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| 34 | 34 | | tax due for the report after applying all other applicable credits. |
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| 35 | 35 | | Sec. 171.705. APPLICATION FOR CREDIT. (a) A taxable entity |
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| 36 | 36 | | must apply for a credit under this subchapter on or with the report |
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| 37 | 37 | | for which the credit is claimed. |
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| 38 | 38 | | (b) The comptroller shall prescribe the form and method of |
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| 39 | 39 | | applying for a credit under this section. A taxable entity must use |
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| 40 | 40 | | the form and method prescribed by the comptroller to apply for the |
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| 41 | 41 | | credit. |
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| 42 | 42 | | (c) The comptroller may require a taxable entity to submit |
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| 43 | 43 | | with an application any information the comptroller determines is |
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| 44 | 44 | | necessary to determine whether the taxable entity meets the |
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| 45 | 45 | | requirements of Section 171.703. |
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| 46 | 46 | | Sec. 171.706. ASSIGNMENT PROHIBITED; EXEMPTION. A taxable |
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| 47 | 47 | | entity may not convey, assign, or transfer the credit allowed under |
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| 48 | 48 | | this subchapter to another taxable entity unless substantially all |
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| 49 | 49 | | of the assets of the taxable entity are conveyed, assigned, or |
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| 50 | 50 | | transferred in the same transaction. |
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| 51 | 51 | | Sec. 171.707. RULES. The comptroller shall adopt rules |
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| 52 | 52 | | necessary to implement and administer this subchapter. |
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| 53 | 53 | | SECTION 2. This Act applies only to a report originally due |
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| 54 | 54 | | on or after the effective date of this Act. |
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| 55 | 55 | | SECTION 3. This Act takes effect January 1, 2024. |
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