Texas Senate Bill SB1803

Texas 2025 - 89th Regular

• Filed: 3/3/25

Caption

Relating to a franchise tax credit for taxable entities that subsidize child-care costs of the entities' employees.

Impact

If enacted, SB1803 would represent a significant shift in the way Texas approaches employee benefits related to child care, aiming to alleviate the financial burden on working families. The introduction of this tax credit could incentivize more businesses to subsidize child care costs, potentially enhancing employee satisfaction and retention. Additionally, it may contribute to a healthier workforce by enabling parents to secure reliable child care while they work, thus promoting overall economic productivity.

Summary

Senate Bill 1803 seeks to introduce a franchise tax credit for taxable entities that subsidize child-care costs incurred by their employees. Specifically, the bill defines eligible employees and outlines that employers can receive a tax credit if they subsidize at least $2,400 annually for each employee's child care during their working hours. This subsidy can be utilized at licensed child-care facilities or registered family homes, allowing businesses to provide meaningful support to their workforce in balancing employment and family responsibilities.

Contention

However, potential points of contention surrounding this bill may include discussions on its fiscal impact, given the cap on credits available in a state fiscal year set at $20 million. Legislators and stakeholders may debate the appropriate allocation of these credits and whether the benefits of the bill justify the costs incurred by the state. There may also be concerns about ensuring that the subsidies genuinely reach employees in need and questioning the effectiveness of such tax credits in genuinely addressing accessibility and affordability of child care.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 171. Franchise Tax
  • Section: New Section