Bill > S4829

Introduced Session

This bill provides corporation business tax and gross income tax credits to employers for certain expenses incurred for the provision of child care services for the children of employees. Under the bill, the combined value of all tax credits allowed to employers subject to the corporation business tax or gross income tax may not exceed $10 million in any tax year. Specifically, the bill permits an employer to claim a tax credit of up to $100,000 per taxable period for 50 percent of any of the following expenses incurred by the taxpayer during the taxable period: (1) expenses related to the acquisition, construction, reconstruction, renovation, or other improvements to real property in this State that is to be used by the taxpayer, or another person under contract or agreement with the taxpayer, to conduct, maintain, and operate a qualified child care center primarily for the children of individuals employed by the taxpayer; (2) expenses related to the maintenance and operation of an on-site qualified child care center of the taxpayer that is used primarily by the children of individuals employed by the taxpayer; (3) expenses paid to another person or entity, under contract or agreement with the taxpayer, to provide child care services to children of individuals employed by the taxpayer at a qualified child care center; or (4) payments made to an individual employed by the taxpayer to subsidize expenses incurred by the employee for child care services provided at a qualified child care center for children of the employee. Under the bill, the Commissioner of Labor and Workforce Development (commissioner) is required to review and approve applications for the tax credit on a rolling basis to ensure that the combined value of all tax credits awarded to employers pursuant to the bill does not exceed the tax credit cap in any tax year. The bill provides that to be eligible to claim the credit, a taxpayer is required to submit an application to the commissioner, in a form and manner prescribed by the commissioner, which includes evidence satisfactory to the commissioner of the taxpayer's expenses for which the taxpayer seeks a tax credit. To claim the credit allowed, the taxpayer is required to attach the credit certificate issued for that tax period to the taxpayer's tax return. Moreover, upon approval of any application for the construction of a child care center, a qualified taxpayer is required to enter into an agreement with the director. The bill requires the agreement, at a minimum, to include certain provisions as described in the bill, including to require the employer to demonstrate the intended use and status of the real property acquired, constructed, reconstructed, renovated, or otherwise improved in this State, and requires the employer to use that property to conduct, maintain, and operate a qualified child care center primarily for the children of individuals employed by the employer. Under the bill, an employer receiving a tax credit may file an application with the director for a tax credit transfer certificate in lieu of the taxpayer being allowed to claim any amount of the transferred credit against the tax liability of the taxpayer. The bill specifies that, if issued, the certificate may be sold to another person that may have a tax liability under certain other State taxes in exchange for private financial consideration, but stipulates that the sale cannot be made for consideration of less than 75 percent of the transferred credit amount. The bill defines "child care services" as services provided for the care, supervision, and education of children under the age of 13 years that meet State licensing and quality standards. A "qualified child care center" is also defined as a facility that is licensed as a child care center by the Department of Children and Families, but specifically excludes from that definition facilities licensed by the department if: the principal use of the facility is for some purpose other than the care, development, and supervision of children; the facility is not used on a regular basis to provide for the care, development, and supervision of children; enrollment in the facility is not open to children of individuals employed by the business claiming the credit; or use of the facility is limited or restricted under procedures, criteria, or other systems of selection that unfairly discriminate. Under the bill, the commissioner is required, in consultation with the Commissioner of Human Services and the Director of the Division of Taxation in the Department of the Treasury, to conduct an annual evaluation of the tax credits issued under the bill to assess the impact of the tax credits on the availability of, and employee satisfaction with, employer-provided child care, and submit an annual report to the Governor and Legislature detailing the number of businesses participating, total tax credits claimed, and recommendations for improvements to the tax incentive.

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Troy Singleton (D)*, 

Introduced in the Senate, Referred to Senate Economic Growth Committee (on 11/06/2025)

Official Document