CHILD CARE EXEMPTIONS

Certain child care facilities may be eligible for a property tax exemption that will lower their county and city property taxes if they participate in the Texas Workforce Commission’s Texas Rising Star Program and maintain a minimum 20% enrollment of children receiving subsidized services through the Texas Workforce Commission. Only real property accounts are eligible for this exemption. Properties that claim a residence homestead exemption or lease any part of the property as a primary residence are not eligible.  Business Personal Property accounts do not qualify.

Texas law requires that property owners pass on all savings to the child care provider(s) that rent their facilities. For properties taxed as a single entity but subdivided for tenants, only the square footage used for child care may be used to calculate the tax exemption.

Once the child care exemption is granted, an application does not need to be resubmitted annually unless the property’s ownership changes or qualifications for the exemption change. The chief appraiser may require a new application to confirm eligibility by sending a written notice and an application.

TO APPLY

All eligible facilities must submit an application (Form 50-844) and supporting documentation:

• Documentation that the child care facility participates in the Texas Workforce Commission’s Texas Rising Star Program as described by Government Code Section 2308.3155.
• Documentation that at least 20% of children enrolled in the child care facility receive subsidized child care services provided through the child care services program administered by the Texas Workforce Commission.

Facilities that do not own their property and rent their spaces will also need to submit Form 50-845, which the property owner must complete. As part of this form, the property owner must:

• Provide the child care provider with a disclosure document stating:
  • The amount of property taxes the property owner is saving as a result of the exemption; and
  • How the property owner will ensure that rent charged to the child care provider is reduced to equally match the exemption reduction.
• State the amount they are reducing in rent charged to the child care provider.
• Certify that the total rent charged to the child care provider is not higher than the average rental costs for child care facilities.
• Certify that the total rent charged to the child care provider is similar to that of other tenants leasing a similar space.