Bill > HB5272

This bill creates a new franchise tax credit for businesses that establish and operate an on-site licensed child-care center exclusively for their employees' children. Specifically, the credit allows taxable entities to claim 30% of the net operating costs of their child-care center, or 35% if the center is certified in the Texas Rising Star Program. For the first year a center is opened, businesses can claim 20% of the total construction and preparation costs. The credit is subject to limitations based on the total franchise tax due: companies with $3 million or less in taxes can claim up to $100,000, those between $3-10 million can claim up to $250,000, and those with $10 million or more can claim up to $500,000. To qualify, the child-care center must be located at or immediately adjacent to the workplace and available only to the company's employees. Businesses must apply for the credit with their tax report and provide requested documentation to the comptroller. The credit cannot be transferred to another entity unless substantially all of the company's assets are also transferred. The bill will take effect on January 1, 2026, and apply to tax reports due on or after that date.

Budget and Finance

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB5272