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.