| (a) Effective date. A corporation may claim a day care credit
or an after school credit only for expenditures made in Texas on or after
January 1, 2000.
(b) Definitions. The following words and terms, when used in
this section, shall have the following meanings, unless the context clearly
indicates otherwise.
(1) "Day-care center" has the meaning assigned by Human Resources
Code, §42.002.
(2) "Expenditure" means a direct contribution, donation, gift,
or payment, but does not include an indirect contribution, donation, gift,
or payment. Subsections (e) and (f) of this section set out qualifying expenditures.
For example, a payment to an organization directly operating a qualifying
program could be a qualifying expenditure, but a payment to a charitable organization
who distributes the funds to another organization that actually operates the
qualifying program will not be a qualifying expenditure.
(3) "Family home" has the meaning assigned by Human Resources
Code, §42.002.
(4) "Primarily" means more than 50%.
(5) "School-age child care" means care provided before or after
school and during the summer and holidays primarily for children who are at
least five years of age but younger than 14 years of age. The program must
provide care during school holidays, when most businesses are open and most
parents are working, but need not provide care on universally-recognized holidays,
such as Thanksgiving, Christmas, and New Year's Day.
(c) Information required. A corporation that claims the day
care credit or after school credit under this section must submit all additional
information required by the Comptroller necessary to complete the report required
by Tax Code, §171.707 and §171.837.
(d) Limitations. A corporation may not convey, assign, or transfer
the day care credit or after school credit to another entity, unless all of
the assets of the corporation are conveyed, assigned, or transferred in the
same transaction. The total credits that a corporation claims for a report
may not exceed the total amount of franchise tax due for the report.
(e) Day care credit.
(1) A corporation may claim a credit under this subsection
only for a qualifying expenditure relating to:
(A) the establishment or operation of a day-care center primarily
to provide care for the children of employees of the corporation or for children
of the employees of the corporation and one or more other entities sharing
the costs of establishing and operating the center; or
(B) the purchase of child-care services that are actually provided
to children of employees of the corporation at a:
(i) day-care center; or
(ii) family home that is registered or listed with the Department
of Protective and Regulatory Services under Human Resources Code, Chapter
42.
(2) A qualifying expenditure means an expenditure for:
(A) planning the day-care center;
(B) preparing a site to be used for the day-care center;
(C) constructing the day-care center;
(D) renovating or remodeling a structure to be used for the
day-care center;
(E) purchasing equipment necessary in the use of the day-care
center and installed for permanent use in or immediately adjacent to the day-care
center, including kitchen appliances and other food preparation equipment;
(F) expanding the day-care center;
(G) maintaining and operating the day-care center, including
paying direct administration and staff costs; or
(H) purchasing all or part of child-care services that are
actually provided to children of employees of the corporation at a day-care
center or registered or listed family home.
(3) The amount of credit:
(A) is equal to the lesser of 50% of the corporation's qualifying
expenditures or $50,000; and
(B) may not exceed 90% of the amount of tax due for the report
on which the credit is claimed for reports that are originally due before
January 1, 2002; for reports that are originally due on or after January 1,
2002, the credit may not exceed 90% of the amount of tax due for the report
before any other applicable credits.
(4) If a corporation shares in the cost of establishing or
operating a day-care center, the corporation is entitled to a credit for the
qualifying expenditures made by that corporation, subject to the limitation
prescribed by subsection (d) of this section.
(5) A corporation must apply for a credit under this subsection
on or with the franchise tax report for the period for which the credit is
claimed.
(6) If the corporation is claiming a credit for a qualifying
expenditure for purchasing child-care services, the corporation must maintain
proof that the services were actually provided to children of employees of
the corporation at a day-care center or registered or listed family home.
(7) The comptroller shall adopt a form for corporations to
use to apply for and claim the credit. A corporation must use this form to
apply for and claim the credit.
(8) A corporation may claim a credit under this subsection
for qualifying expenditures made during an accounting period only against
the tax owed for the corresponding reporting period.
(f) After school care credit.
(1) A corporation may claim a credit under this subsection
only for a qualifying expenditure relating primarily to the operation of a
school-age child care program that is operated by:
(A) a nonprofit organization licensed under Human Resources
Code, Chapter 42;
(B) a nonprofit, accredited educational facility, including:
(i) an organization whose standards of care are consistent
with those set out by a recognized national accreditation body for school-age
child care, or
(ii) an organization who is a charter member of a national
organization that establishes school-age child care guidelines as a prerequisite
for national affiliation or membership;
(C) another nonprofit entity under contract with the nonprofit,
accredited educational facility, if the Texas Education Agency or Southern
Association of Colleges and Schools has approved the curriculum content of
the program operated under the contract; or
(D) a county or municipality, if the governing body of the
county or municipality annually adopts standards of care by order or ordinance
that include minimum child-to-staff ratios, staff qualifications, facility,
health, and safety standards, and mechanisms for monitoring and enforcing
the standards.
(2) A qualifying expenditure means an expenditure for:
(A) constructing, renovating, or remodeling a facility or structure
to be used by the program;
(B) purchasing necessary equipment, supplies, or food to be
used in the program; or
(C) operating the program, including administrative and staff
costs.
(3) The amount of the credit is equal to 30% of a corporation's
qualifying expenditures.
(4) A corporation may claim a credit under this subsection
for a qualifying expenditure during an accounting period only against the
tax owed for the corresponding reporting period.
(5) For reports that are originally due before January 1, 2002,
a corporation may not claim a credit in an amount that exceeds 50% of the
amount of net franchise tax due, after applying any other credits, for the
reporting period. For reports that are originally due on or after January
1, 2002, a corporation may not claim a credit in an amount that exceeds 50%
of the amount of franchise tax due, before application of any other credits
for the reporting period.
(6) A corporation must apply for a credit under this subsection
on or with the tax report for the period for which the credit is claimed.
(7) The comptroller shall adopt a form for corporations to
use to apply for and claim the credit. A corporation must use this form to
apply for and claim a credit.
(8) A corporation is not eligible for the credit if the corporation
cannot establish that the facilities, equipment, supplies, food, administrative
services, and staff services are primarily used for the program. Therefore,
a corporation must maintain proof, in the form of a written acknowledgement
provided by the recipient operating the qualifying program. The written acknowledgement
must set out the amount of the donation, contribution, gift, or payment and
must specify that the donation, contribution, gift, or payment will be used
for a qualifying expenditure, as set out in subsection (f)(2) of this section,
primarily for the program.
|
