Provides for changes to the School Readiness Tax Credit. (1/1/26) (EN DECREASE GF RV See Note)
Summary
SB 233 revises Louisiana’s School Readiness Tax Credit program and renames the chapter to the School Readiness Workforce Child Care Tax Credits. The bill keeps the refundable income tax credit for businesses that support child care, but updates the definition of eligible business child care expenses and adjusts the credit percentages tied to child care quality ratings. Under the bill, businesses may claim credits for certain construction, renovation, expansion, repair, equipment, maintenance, operating costs, direct payments for employee child care, and the purchase of child care slots at eligible facilities.
The bill also adds a new annual statewide cap on credits. Beginning in 2026, the cap is set at $1 million, may increase by $1 million in later years if at least 80% of the prior year’s cap was used, and cannot exceed $5 million. The Department of Revenue must publish the cap amount each year and administer applications on a first-come, first-served basis, with pro rata allocation if applications exceed available credits on a given day. The credit applies to taxable periods beginning on or after January 1, 2026, and becomes effective the same date.
Impact
SB 233 amends Title 47 of the Louisiana Revised Statutes governing tax credits, changing both the program name and the substantive rules for business-supported child care credits. It modifies the eligible expense categories, changes the credit percentages for facilities with different quality ratings, and creates a calendar-year credit cap and application process administered by the Department of Revenue. The bill affects businesses claiming the credit, child care facilities that qualify under the program, and the state treasury through reduced income tax collections.
Sentiment
The bill appears to have broad bipartisan support and little visible opposition. It passed the Senate and House unanimously in recorded votes, and the conference report was also adopted overwhelmingly. The voting history suggests the measure was viewed as a policy update to encourage employer-supported child care rather than a controversial tax change.
Contention
There is no recorded committee testimony in the provided materials, and the floor votes show no opposition. The main policy choices embedded in the bill are the size and growth of the annual credit cap, the first-come, first-served allocation method, and the revised credit percentages tied to child care quality ratings. Any potential contention would likely center on the fiscal cost to the state, the administrative burden of the cap and application process, and whether the credit structure sufficiently incentivizes higher-quality child care, but no specific objections are documented here.