H.B. No. 5273 proposes a new franchise tax credit aimed at incentivizing licensed child-care centers in Texas to expand their capacity for child care. The bill introduces Subchapter P-1 to Chapter 171 of the Tax Code, defining a "licensed child-care center" and outlining the eligibility criteria for the tax credit. To qualify, a taxable entity must operate one or more licensed child-care centers that are certified under the Texas Rising Star Program. The credit amount is tiered based on the percentage increase in capacity, with higher percentages yielding greater credits for additional salaries paid during the reporting period.

The bill also establishes specific application procedures for claiming the credit, including the requirement for taxable entities to apply on or with their tax report for the relevant period. It prohibits the transfer of credits unless all assets of the entity are transferred in the same transaction. The comptroller is tasked with adopting necessary rules for the implementation and administration of this subchapter. The provisions of this Act will take effect on January 1, 2026, and will apply to reports due on or after that date.

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