Bill > HB5273

This bill establishes a franchise tax credit for child-care centers that increase their operational capacity, with the goal of expanding child care availability in Texas. Specifically, the bill creates a new tax credit for licensed child-care centers that are certified in the Texas Rising Star Program and increase their capacity. The credit amount varies based on the percentage of capacity increase: 50% of additional salary for a 25-50% capacity increase, 75% for a 50-75% increase, and 100% for capacity increases of 75% or more. For entities that are part of an affiliated group filing a combined tax report, the credit is calculated based on capacity increases across at least 50% of their child-care center locations. Taxable entities can claim this credit for up to three consecutive reporting periods if they maintain the increased capacity. The total credit cannot exceed the franchise tax owed, and entities must apply for the credit with their tax report, providing requested information to the comptroller. The bill includes restrictions on transferring the credit and requires the comptroller to develop rules for implementing the program. The tax credit will take effect on January 1, 2026, and applies to tax reports due on or after that date, with the intention of incentivizing child-care providers to expand their services and increase child care availability in the state.

Budget and Finance

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB5273