The proposed bill, H.B. No. 5273, aims to establish a franchise tax credit for licensed child-care centers in Texas that increase their capacity to care for children. The intent of the legislation is to incentivize large-scale child-care providers to expand their services, thereby enhancing the availability of child care across the state. The bill introduces a new subchapter, Subchapter P-1, to Chapter 171 of the Tax Code, which outlines the definitions, qualifications, and conditions under which a taxable entity can claim this credit. Specifically, it defines a "licensed child-care center" and sets forth the criteria for eligibility, including participation in the Texas Rising Star Program.

The bill details the amount of credit available based on the percentage increase in capacity, with varying percentages of additional salary costs covered depending on the extent of the increase. It also stipulates that entities can continue to claim the credit for two subsequent reports if they maintain the increased capacity. Furthermore, the total credit claimed cannot exceed the franchise tax due after applying other credits. The bill mandates that applications for the credit must be submitted with the relevant tax report and prohibits the transfer of credits unless the entity's assets are substantially conveyed in the same transaction. The act is set to take effect on January 1, 2026, and applies to reports due on or after that date.

Statutes affected:
Introduced: ()