(a) Any person subject to the Early Care and Education Commercial Rents Tax imposed under this Article 21 that leases or provides Commercial Space in a property in the City for a Qualifying Child Care Facility that operates for more than six months in a tax year shall be allowed a credit against the Early Care and Education Commercial Rents Tax for that tax year. If a person entitled to the credit under this Section 2106.1 is required to file an Early Care and Education Commercial Rents Tax return on a combined basis under Section 2107, the credit may be claimed against the Early Care and Education Commercial Rents Tax liability required to be reflected on the combined return for that tax year. In no event shall the credit allowed under this Section 2106.1 reduce a person or combined group’s Early Care and Education Commercial Rents Tax liability for any tax year to less than zero, and no credit shall be allowed as a carryforward to a subsequent tax year.
(b) For purposes of this Section 2106.1, the credit for a tax year shall be based on the total number of Infants, Toddlers, and Preschool-Age Children for which the Qualifying Child Care Facility is licensed by the California Department of Social Services to provide care and shall be in the amount prescribed in the table below.
Number of Infants, Toddlers, and Preschool-Age Children | Amount of Credit |
1 to 49 | $7,200 |
50 to 99 | $16,000 |
100 or more | $36,000 |
(c) The following definitions shall apply for purposes of this Section 2106.1.
(1) “Qualifying Child Care Facility” means a facility that is licensed by the California Department of Social Services, or any successor agency, to provide non-medical care to Infants, Toddlers, Preschool-Age Children, or any combination thereof in need of personal services, supervision, or assistance essential for sustaining the activities of daily living or for the protection of the individual on less than a 24-hour basis in a group setting.
(2) “Infants” means children under two years of age.
(3) “Toddlers” means children between the ages of 18 months and 30 months.
(4) “Preschool-Age Children” means children who are enrolled in a child day care center licensed by the California Department of Social Services, or any successor agency, and who are not enrolled in a child care center or part of a child care center where less than 24-hour per day non-medical care and supervision are provided to Infants or School-Age Children.
(5) “School-Age Child” means a child who has entered the first grade or above or who is in a child care program providing care and supervision exclusively to children enrolled in kindergarten and above.
(d) To be eligible for the credit authorized under this Section 2106.1, persons wishing to claim the credit must:
(1) Maintain a reasonable method of documentation that can be reviewed or verified objectively that demonstrates that the person is eligible for the credit provided for in this Section 2106.1, and provide such documentation to the Tax Collector upon request; and
(2) File a timely annual Early Care and Education Commercial Rents Tax return regardless of the amount of liability, if any, shown on the return after claiming the credit provided for in this Section 2106.1.
(e) The Tax Collector shall verify that any credit claimed pursuant to this Section 2106.1 is correct. The Office of Early Care and Education, or any successor agency, shall provide to the Tax Collector upon request such information that the Tax Collector may require to verify that a Qualifying Child Care Facility for which the credit is claimed meets the eligibility requirements of this Section 2106.1, and the Tax Collector may share taxpayer information with the Office of Early Care and Education, or any successor agency, for this purpose. To the extent permitted by law, the Office of Early Care and Education, or any successor agency, shall maintain the confidentiality of any such information that the Tax Collector provides, and shall be subject to Section 6.22-1 of Article 6 of the Business and Tax Regulations Code with respect to such information.
(f) The Tax Collector shall submit an annual report to the Board of Supervisors for each year for which the credit authorized under this Section 2106.1 is available, that sets forth aggregate information on the dollar value of the credits taken each year and the number of persons taking the credit.
(g) The Controller, not later than four years after the effective date of the ordinance in Board of Supervisors File No. 181082 establishing this Section 2106.1, shall perform an assessment and review of the effect of the credit provided by this Section 2106.1. Based on such assessment and review the Controller shall prepare and submit an analysis to the Board of Supervisors. The analysis shall be based on factors that the Controller deems relevant, and may include, but shall not be limited to, data contained in the annual reports to the Board of Supervisors as required by subsection (f) of this Section 2106.1.
(h) The credit provided by this Section 2106.1 shall be allowable in tax years ending after December 31, 2018, and shall expire by operation of law on December 31, 2023 2028. No person may use or claim the credit provided for under this Section 2106.1 after the expiration date of this Section.