TX SB654

Creates a franchise tax credit for taxable entities operating licensed child-care centers certified as Texas Rising Star Program providers that increase their capacity to serve children

Credit amounts are tiered based on capacity increases: 50% of additional salary costs for 25-49% capacity increase, 75% for 50-74% increase, and 100% for 75% or greater increase

Affiliated groups filing combined reports must demonstrate capacity increases at 50% or more of their child-care center locations to qualify for the credit

Entities may claim the credit for up to three consecutive reporting periods (initial report plus two subsequent reports) if they maintain the increased capacity

Credit cannot exceed franchise tax due after other credits are applied, and cannot be transferred except when substantially all business assets are conveyed; takes effect January 1, 2026