Bill > SB654

This bill establishes a new franchise tax credit for licensed child-care centers that increase their capacity to care for children, with the goal of expanding child-care availability in Texas. The credit applies to taxable entities that operate licensed child-care centers certified in the Texas Rising Star Program and provides tax incentives based on the percentage increase in a center's capacity. For individual entities, the credit ranges from 50% to 100% of additional salaries associated with capacity increases, depending on whether the center expands capacity by 25%, 50%, or 75%. For entities in a combined tax reporting group, similar credit percentages apply if at least 50% of their child-care center locations increase capacity. Entities can claim the same credit level on the two subsequent tax reports after their initial claim, provided they maintain the increased capacity. The total credit cannot exceed the franchise tax due, and entities must apply for the credit with their tax report, providing requested information to the comptroller. The bill prohibits transferring the credit except in cases of substantial asset transfer and requires the comptroller to develop implementation rules. The tax credit will take effect on January 1, 2026, and will apply to tax reports due on or after that date.

Budget and Finance

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=SB654