SB1803 - Relating to a franchise tax credit for taxable entities that subsidize child-care costs of the entities' employees.

  89R8788 SRA-D     By: Alvarado S.B. No. 1803       A BILL TO BE ENTITLED   AN ACT   relating to a franchise tax credit for taxable entities that   subsidize child-care costs of the entities' employees.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Chapter 171, Tax Code, is amended by adding   Subchapter W to read as follows:   SUBCHAPTER W.     TAX CREDIT FOR CHILD-CARE SUBSIDY           Sec.   171.9261.     DEFINITION. In this subchapter, "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 includes an independent contractor.           Sec.   171.9262.     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.   171.9263.     QUALIFICATION. A taxable entity qualifies   for a credit under this subchapter if the taxable entity subsidizes   at least $2,400 of the annual cost incurred by each employee of the   entity to obtain child care during the employee's normal working   hours at:                 (1)     a child-care facility licensed under Chapter 42,   Human Resources Code, including a facility located on the   employer's premises; or                 (2)     a registered or listed family home under Chapter   42, Human Resources Code.           Sec.   171.9264.     AMOUNT OF CREDIT; LIMITATION.   (a) Subject   to Subsections (b) and (c), the amount of a taxable entity's credit   for a report is equal to the lesser of:                 (1)     the total amount of the subsidies described by   Section 171.9263 the entity paid during the period on which the   report is based; or                 (2)     four percent of the amount of the franchise tax due   for the report after applying all other applicable credits.           (b)     The total credit claimed on a report, including the   amount of any carryforward under Section 171.9265, may not exceed   the amount of franchise tax due for the report after applying all   other applicable credits.           (c)     The total amount of credits that may be awarded under   Subsection (a) in a state fiscal year may not exceed $20 million.           (d)     The comptroller by rule shall prescribe procedures by   which the comptroller will allocate the amount of credits available   under Subsection (c). The procedures must provide that credits are   allocated to taxable entities that applied for the credit on a pro   rata basis.           Sec.   171.9265.     CARRYFORWARD. (a)   If a taxable entity is   eligible for a credit that exceeds the limitation under Section   171.9264(b), the entity may carry the unused credit forward for not   more than two consecutive reports.           (b)     A carryforward is considered the remaining portion of a   credit that cannot be claimed on a report because of the limitation   under Section 171.9264(b).           (c)     Credits, including a carryforward, are considered to be   used in the following order:                 (1)  a carryforward under this section; and                 (2)     a credit for the period on which the report is   based.           Sec.   171.9266.     APPLICATION FOR CREDIT.   A taxable entity   must:                 (1)     apply for a credit under this subchapter on or with   the report for which the credit is claimed and in the manner   prescribed by the comptroller; and                 (2)     include with the application any information   requested by the comptroller to determine the entity's eligibility   for and the amount of the credit.           Sec.   171.9267.     ASSIGNMENT PROHIBITED; EXCEPTION.   A taxable   entity may not convey, assign, or transfer the credit allowed under   this subchapter to another taxable entity unless substantially all   of the assets of the taxable entity are conveyed, assigned, or   transferred in the same transaction.           Sec.   171.9268.     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.