Bill Text: TX HB864 | 2021-2022 | 87th Legislature | Introduced
Bill Title: Relating to a franchise tax credit pilot program for taxable entities that contribute to an employee dependent care flexible spending account.
Spectrum: Slight Partisan Bill (Democrat 2-1)
Status: (Introduced - Dead) 2021-03-01 - Referred to Ways & Means [HB864 Detail]
Download: Texas-2021-HB864-Introduced.html
| 87R253 GRM-D | ||
| By: Hinojosa | H.B. No. 864 | |
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| relating to a franchise tax credit pilot program for taxable | ||
| entities that contribute to an employee dependent care flexible | ||
| spending account. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. Chapter 171, Tax Code, is amended by adding | ||
| Subchapter P to read as follows: | ||
| SUBCHAPTER P. TAX CREDIT PILOT PROGRAM FOR EMPLOYER CONTRIBUTIONS | ||
| TO DEPENDENT CARE FLEXIBLE SPENDING ACCOUNTS | ||
| Sec. 171.801. DEFINITION. In this subchapter, "dependent | ||
| care flexible spending account" means a pretax benefit account used | ||
| to pay eligible dependent care services as authorized by the | ||
| Internal Revenue Code of 1986, as effective on January 1, 2021. | ||
| Sec. 171.802. ENTITLEMENT TO CREDIT. A taxable entity is | ||
| entitled to a credit in the amount and under the conditions provided | ||
| by this subchapter against the tax imposed under this chapter. | ||
| Sec. 171.803. QUALIFICATION. (a) Subject to Subsection | ||
| (b), a taxable entity qualifies for a credit under this subchapter | ||
| if the taxable entity: | ||
| (1) has an average of not more than 500 employees | ||
| during the period on which the report is based; and | ||
| (2) contributes to the dependent care flexible | ||
| spending account of each employee of the taxable entity who | ||
| maintains an account and receives from the taxable entity an annual | ||
| salary or wage of not more than $65,000. | ||
| (b) A combined group qualifies for a credit under this | ||
| subchapter in connection with any member of the combined group that | ||
| satisfies the requirements of Subsection (a). | ||
| Sec. 171.804. AMOUNT OF CREDIT; LIMITATIONS. (a) Subject | ||
| to Subsection (b), the amount of the credit for a report in | ||
| connection with each employee described by Section 171.803(a)(2) is | ||
| equal to the lesser of: | ||
| (1) 50 percent of the contributions made by the | ||
| taxable entity to the employee's dependent care flexible spending | ||
| account, excluding any portion of a contribution returned to the | ||
| taxable entity; or | ||
| (2) $2,500. | ||
| (b) The total amount of the credit for each report is equal | ||
| to the lesser of: | ||
| (1) the total of the credits allowed under Subsection | ||
| (a) for the reporting period for all employees; or | ||
| (2) the amount of franchise tax due after applying all | ||
| other applicable credits. | ||
| Sec. 171.805. APPLICATION FOR CREDIT. (a) A taxable entity | ||
| must apply for a credit under this subchapter on or with the tax | ||
| report for the period for which the credit is claimed. | ||
| (b) The comptroller shall promulgate a form for the | ||
| application for the credit. A taxable entity must use the form in | ||
| applying for the credit. | ||
| Sec. 171.806. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. A | ||
| taxable entity may claim a credit under this subchapter for a report | ||
| only in connection with contributions made during the accounting | ||
| period on which the report is based. | ||
| Sec. 171.807. DEPOSIT OF CERTAIN REVENUE. Notwithstanding | ||
| any other law, for each state fiscal year, the comptroller shall | ||
| deposit to the credit of the property tax relief fund an amount of | ||
| revenue received from the tax imposed under this chapter sufficient | ||
| to offset any decrease in deposits to that fund for the state fiscal | ||
| year that results from the implementation of this subchapter. | ||
| Sec. 171.808. EXPIRATION. This subchapter expires December | ||
| 31, 2023. | ||
| SECTION 2. (a) Not later than September 1, 2024, the | ||
| comptroller shall prepare and deliver to the governor, the | ||
| lieutenant governor, the speaker of the house of representatives, | ||
| and the presiding officer of each legislative standing committee | ||
| with primary jurisdiction over taxation a report that evaluates the | ||
| effect of the pilot program established under Subchapter P, Chapter | ||
| 171, Tax Code, as added by this Act, on employer contributions to | ||
| employees' dependent care flexible spending accounts for which | ||
| credits are granted under the pilot program. The report must | ||
| include a recommendation regarding whether the credit allowed under | ||
| the pilot program should be reestablished. | ||
| (b) A taxable entity that claims a credit under Subchapter | ||
| P, Chapter 171, Tax Code, as added by this Act, shall provide to the | ||
| comptroller information the comptroller requests to prepare the | ||
| report described by Subsection (a) of this section. | ||
| SECTION 3. A taxable entity may claim the credit under | ||
| Subchapter P, Chapter 171, Tax Code, as added by this Act, only for | ||
| contributions made on or after September 1, 2021, and before | ||
| January 1, 2024, and only on a franchise tax report originally due | ||
| under Chapter 171, Tax Code, on or after January 1, 2022, and before | ||
| January 1, 2025, notwithstanding the expiration of Subchapter P, | ||
| Chapter 171, Tax Code, as added by this Act. | ||
| SECTION 4. This Act takes effect September 1, 2021. | ||
