This provision defines key terms used in the article, including types of taxes, child care facilities, employees, employers, tax credits, grants, and related thresholds.
For the purposes of this article, the following terms have the following meanings: (1) APPLICABLE TAXES. An employer’s, taxpayer’s, or child care provider’s, or in the case of a pass-through entity that is an employer, taxpayer, or child care provider, such employer’s, taxpayer’s, or child care provider’s owners’ taxes as follows: a. Taxes levied in Chapter 18 of Title 40. b. The state portion of taxes levied in Chapter 16 of Title 40. c. Taxes levied in Section 27-4A-3(a). d. Taxes levied in Article 2 of Chapter 21 of Title 40, not to include the freight line and equipment tax levied in Section 40-21-52. (2) CHILD or CHILDREN. Individuals who are five years of age or less. (3) CHILD CARE FACILITY. A facility meeting the definition found in Section 38-7-2(7), which is licensed by the Department of Human Resources and is participating in the quality rating and improvement system. (4) CHILD CARE PROVIDER. An Alabama taxpayer that owns a child care facility or a nonprofit entity that owns and operates a child care facility in this state. (5) ELIGIBLE CHILD or ELIGIBLE CHILDREN. Children who participate in the Child Care Subsidy Program administered by the Department of Human Resources and who attend a child care facility operated by a child care provider. (6) ELIGIBLE EXPENSES. a. Expenses incurred by an employer for: 1. The construction, renovation, expansion, or repair of a child care facility, or for the purchase of equipment for such facility, or for the maintenance and operation thereof. 2. Payments made to child care facilities or employees for the provision of child care at child care facilities for children of employees. 3. Payments made to child care facilities to reserve services for children of employees. b. For purposes of this definition, “child care facility” or “child care facilities” shall also include a facility meeting the definition found in Section 38-7-2(7), which is operated, directly or indirectly, by a public institution of higher education as defined in Section 16-5-1. (7) EMPLOYEE. A resident of this state who works on a full-time or part-time basis for an employer. An employee shall include independent contractors engaged by an employer and the owners of an employer that also work for such employer on a full-time or part-time basis. Employees whose wages, excluding any overtime or bonuses, exceed eighty thousand dollars ($80,000) in a calendar year are not employees for the purposes of this article. (8) EMPLOYER. A for-profit business lawfully operating in this state. (9) EMPLOYER TAX CREDIT. A tax credit to be applied against applicable taxes for the year in which the eligible expenses are incurred by an employer, equal to the total eligible expenses incurred by the employer, up to six hundred thousand dollars ($600,000) per year for each employer. (10) FACILITY TAX CREDIT. A tax credit to be applied against applicable taxes, calculated in accordance with Section 40-18-543(a), but not exceeding twenty-five thousand dollars ($25,000) per year for each child care facility. (11) GRANT. A grant awarded by the Department of Human Resources to nonprofit child care providers for the purpose of funding expenses related to the construction, expansion, improvement, repair, or operation of a child care facility or child care facilities, so long as such expenses are made in furtherance of the child care services offered at such child care facility and result in increased quality of care or increased capacity for children at each applicable child care facility. (12) OWNER. A shareholder, partner, or member of a pass-through entity. (13) PASS-THROUGH ENTITY. An Alabama S corporation or a subchapter K entity. (14) QUALITY RATING. The rating applicable to a child care facility under the quality rating and improvement system. (15) QUALITY RATING AND IMPROVEMENT SYSTEM. A system of the Department of Human Resources known as the Alabama Quality STARS program that measures the quality of child care facilities on a scale of one to five stars, with five stars denoting the highest level of quality. (16) RURAL AREA. Any Alabama county that meets the definition of “targeted county” found in Section 40-18-376.1(a)(2). (17) SMALL BUSINESS. An employer that has fewer than 25 employees. (18) STATE. The State of Alabama.