HB5272 - Relating to a franchise tax credit for taxable entities that operate an on-site child-care center for use by the entity's employees.

  89R1401 SRA-D     By: González of El Paso H.B. No. 5272       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.