Small Business PPE Tax Credit Act

I 116TH CONGRESS 2D SESSION H. R. 7216 To amend the Internal Revenue Code of 1986 to provide a tax credit for personal protective equipment to small businesses, non-profits, inde- pendent contractors, veterans’ organizations, and farmers, among other entities, in any year in which the President declares a national emergency relating to COVID-19. IN THE HOUSE OF REPRESENTATIVES JUNE 15, 2020 Mrs. LAWRENCE (for herself, Mr. BALDERSON, Mr. QUIGLEY, Mr. JOYCE of Pennsylvania, Mr. DELGADO, Mr. MCKINLEY, Ms. SLOTKIN, and Mr. STIVERS) introduced the following bill; which was referred to the Com- mittee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to provide a tax credit for personal protective equipment to small businesses, non-profits, independent contractors, vet- erans’ organizations, and farmers, among other entities, in any year in which the President declares a national emergency relating to COVID-19. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Small Business PPE 4 Tax Credit Act’’. 5 VerDate Sep 11 2014 03:50 Jul 02, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7216.IH H7216 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 7216 IH SEC. 2. FINDINGS. 1 Congress finds the following: 2 (1) On January 21, 2020, the United States 3 confirmed the Nation’s first case of the 2019 novel 4 coronavirus, which presents as the disease COVID– 5 19. 6 (2) On March 11, 2020, the World Health Or- 7 ganization upgraded the COVID–19 outbreak from 8 global health emergency status to a pandemic. 9 (3) On March 15, 2020, the Centers for Dis- 10 ease Control and Prevention recommended a restric- 11 tion on gatherings of 50 or more people in the 12 United States. 13 (4) Beginning in mid-March, the administration 14 issued new guidelines on the pandemic and called for 15 nationwide social distancing, among other pre- 16 cautions, to slow the spread of COVID–19. 17 (5) On March 17, 2020, Dr. Anthony Fauci, in 18 his capacity as Director of the National Institute of 19 Allergy and Infectious Diseases, explained that ‘‘so- 20 cial distancing is really physical separation of people, 21 wherein circumstances where there are crowds, you 22 remove yourself from very close contact.’’ 23 (6) Most Governors executed orders in States 24 across the country to close or restrict operations of 25 business across various industries on a temporary 26 VerDate Sep 11 2014 03:50 Jul 02, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7216.IH H7216 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 7216 IH basis, in an effort to promote social distancing, sty- 1 mie the rapid spread of the coronavirus, and flatten 2 the curve so as not to overwhelm the Nation’s health 3 care system’s capacity. 4 (7) Those closures or operating limitations have 5 caused significant strain on America’s small busi- 6 nesses in the interest of public health. 7 (8) Small businesses are the engine of the 8 United States economy, comprising 99 percent of all 9 business ventures in the United States and account- 10 ing for half of the United States economy. 11 (9) In order to safely resume full operations, 12 these small businesses need access to personal pro- 13 tective equipment; in some cases, States are requir- 14 ing employers and employees use this personal pro- 15 tective equipment in order to allow public entry. 16 (10) Due to the fiscal strain of pandemic-re- 17 lated losses on these small businesses, they cannot 18 and should not bear the financial burden of acquir- 19 ing personal protective equipment without relief. 20 (11) Providing relief through a tax credit for 21 the purchase and use of personal protective equip- 22 ment will directly support small businesses returning 23 to and exceeding pre-COVID-19 pandemic produc- 24 tion levels. 25 VerDate Sep 11 2014 03:50 Jul 02, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7216.IH H7216 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 7216 IH (12) At a Small Business Committee forum on 1 May 28, 2020, Mr. Charles ‘‘Tee’’ Rowe, President 2 and Chief Executive Officer of America’s SBDC, 3 testified to the potential value of such credits. 4 (13) Personal protective equipment tax credits 5 will be instrumental in safely and responsibly re- 6 starting the engine of the United States economy. 7 SEC. 3. PERSONAL PROTECTIVE EQUIPMENT TAX CREDIT. 8 (a) IN GENERAL.—Subpart D of part IV of sub- 9 chapter A of chapter 1 of the Internal Revenue Code of 10 1986 is amended by adding at the end the following new 11 section: 12 ‘‘SEC. 45U. PERSONAL PROTECTIVE EQUIPMENT CREDIT. 13 ‘‘(a) ALLOWANCE OF CREDIT.—For purposes of sec- 14 tion 38, the personal protective equipment credit deter- 15 mined under this section for the taxable year is an amount 16 equal to the amount paid by an eligible taxpayer in car- 17 rying on any trade or business for qualified personal pro- 18 tective equipment expenses during such year. 19 ‘‘(b) MAXIMUM CREDIT.—The credit determined 20 under this section with respect to any eligible taxpayer for 21 any taxable year shall not exceed $25,000. 22 ‘‘(c) DEFINITION AND SPECIAL RULES.—For pur- 23 poses of this section— 24 ‘‘(1) ELIGIBLE TAXPAYER.— 25 VerDate Sep 11 2014 03:50 Jul 02, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7216.IH H7216 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 7216 IH ‘‘(A) IN GENERAL.—The term ‘eligible tax- 1 payer’ means— 2 ‘‘(i) a small business concern, 3 ‘‘(ii) any business concern (including 4 an enterprise that is engaged in the busi- 5 ness of production of food and fiber, 6 ranching and raising of livestock, aqua- 7 culture, and all other farming and agricul- 8 tural related industries), non-profit organi- 9 zation that is described in section 10 501(c)(3) and exempt from tax under sec- 11 tion 501(a), veterans organization, or Trib- 12 al business concern that employs not more 13 than the greater of— 14 ‘‘(I) 500 employees, or 15 ‘‘(II) if applicable, the size stand- 16 ard in number of employees estab- 17 lished by the Small Business Adminis- 18 tration for the industry in which such 19 business concern, non-profit organiza- 20 tion, veterans organization, or Tribal 21 business concern operates, or 22 ‘‘(iii) an individual who operates 23 under a sole proprietorship, as an inde- 24 VerDate Sep 11 2014 03:50 Jul 02, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H7216.IH H7216 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 7216 IH pendent contractor, or as a self-employed 1 individual. 2 ‘‘(B) SMALL BUSINESS CONCERN.—The 3 term ‘small business concern’ has the meaning 4 given such term under section 3 of the Small 5 Business Act (15 U.S.C. 632), and also in- 6 cludes— 7 ‘‘(i) any business concern that em- 8 ploys not more than 500 employees per 9 physical location of such business concern 10 and that is assigned a North American In- 11 dustry Classification System code begin- 12 ning with 72, 13 ‘‘(ii) any business concern operating 14 as a franchise that is assigned a franchise 15 identifier code by the Small Business Ad- 16 ministration, and 17 ‘‘(iii) any business concern that re- 18 ceives financial assistance from a company 19 licensed under section 301 of the Small 20 Business Investment Act of 1958 (15 21 U.S.C. 681). 22 ‘‘(C) DOCUMENTATION REQUIREMENTS.— 23 The Secretary may establish such documenta- 24 VerDate Sep 11 2014 03:50 Jul 02, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H7216.IH H7216 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 7216 IH tion requirements as are necessary to determine 1 eligibility for a credit under this section. 2 ‘‘(2) QUALIFIED PERSONAL PROTECTIVE EQUIP- 3 MENT EXPENSES.—The term ‘qualified personal pro- 4 tective equipment expenses’ includes amounts paid 5 or incurred— 6 ‘‘(A) for the purpose of reducing the risk 7 of Coronavirus Disease 2019 (COVID–19) 8 transmission between people on the premises of 9 the business of the taxpayer, including— 10 ‘‘(i) gloves, medical masks, N–95 res- 11 pirators, eye protection, gowns and aprons, 12 boots or closed-toe work shoes, cleaning de- 13 tergents, hand sanitizers, cleaning products 14 and tools, 15 ‘‘(ii) retrofitting or installation of 16 equipment, and 17 ‘‘(iii) any other relevant expense the 18 Secretary, in consultation with the Sec- 19 retary of Health and Human Services, de- 20 termines necessary, and 21 ‘‘(B) at any time during a year in which, 22 with respect to COVID–19— 23 VerDate Sep 11 2014 03:50 Jul 02, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H7216.IH H7216 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 7216 IH ‘‘(i) the President declares a national 1 emergency under the National Emer- 2 gencies Act (50 U.S.C. 1601 et seq.), or 3 ‘‘(ii) an emergency involving Federal 4 primary responsibility is determined to 5 exist by the President under the section 6 501(b) of the Robert T. Stafford Disaster 7 Relief and Emergency Assistance Act (42 8 U.S.C. 5191(b)). 9 ‘‘(d) DENIAL OF DOUBLE BENEFIT.—No deduction 10 shall be allowed under this chapter for any amount taken 11 into account in determining the credit under this section. 12 ‘‘(e) DENIAL OF CREDIT FOR COUNTERFEIT 13 ITEMS.—No credit shall be allowed under this section with 14 respect to any item if the Secretary determines such item 15 to be counterfeit or sold or distributed in bad faith.’’. 16 (b) CREDIT MADE PART OF GENERAL BUSINESS 17 CREDIT.—Subsection (b) of section 38 of such Code is 18 amended by striking ‘‘plus’’ at the end of paragraph (32), 19 by striking the period at the end of paragraph (33) and 20 inserting ‘‘, plus’’, and by adding at the end the following 21 new paragraph: 22 ‘‘(34) the personal protective equipment credit 23 determined under section 45U.’’. 24 VerDate Sep 11 2014 03:50 Jul 02, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H7216.IH H7216 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 7216 IH (c) CLERICAL AMENDMENT.—The table of sections 1 for subpart D of part IV of subchapter A of chapter 1 2 is amended by adding at the end the following new item: 3 ‘‘Sec. 45U. Personal Protective Equipment Credit.’’. (d) EFFECTIVE DATE.—The amendments made by 4 this section shall apply to expenses made or incurred after 5 December 31, 2019, in taxable years ending after such 6 date. 7 Æ VerDate Sep 11 2014 03:50 Jul 02, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6301 E:\BILLS\H7216.IH H7216 pamtmann on DSKBC07HB2PROD with BILLS