Safe Reopening Tax Credit

I 116TH CONGRESS 2D SESSION H. R. 7222 To provide for a credit against employment taxes for certain virus transmission prevention expenses, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JUNE 15, 2020 Mr. PANETTA introduced the following bill; which was referred to the Committee on Ways and Means A BILL To provide for a credit against employment taxes for certain virus transmission prevention expenses, and for other purposes. 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 ‘‘Safe Reopening Tax 4 Credit’’. 5 SEC. 2. TAX CREDIT FOR SAFETY IMPROVEMENTS. 6 (a) IN GENERAL.—In the case of an eligible em- 7 ployer, there shall be allowed as a credit against applicable 8 employment taxes for each calendar quarter an amount 9 equal to 30 percent of the qualified virus transmission pre- 10 VerDate Sep 11 2014 05:18 Jul 09, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7222.IH H7222 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 7222 IH vention expenses paid or incurred by such employer during 1 such calendar quarter. 2 (b) LIMITATIONS AND REFUNDABILITY.— 3 (1) LIMITATION.—The qualified fixed expenses 4 which may be taken into account under subsection 5 (a) by any eligible employer for any calendar quarter 6 shall not exceed the least of— 7 (A) $15,000, or 8 (B) the greater of— 9 (i) 25 percent of the wages paid with 10 respect to the employment of all employees 11 of the eligible employer for such calendar 12 quarter, or 13 (ii) 6.25 percent of gross receipts of 14 the eligible employer for calendar year 15 2019. 16 (2) CREDIT LIMITED TO CERTAIN EMPLOYMENT 17 TAXES.—The credit allowed by subsection (a) with 18 respect to any calendar quarter shall not exceed the 19 applicable employment taxes for such calendar quar- 20 ter (reduced by any credits allowed under sub- 21 sections (e) and (f) of section 3111 of such Code, 22 sections 7001 and 7003 of the Families First 23 Coronavirus Response Act, and section 2301 of the 24 CARES Act, for such quarter) on the wages paid 25 VerDate Sep 11 2014 05:18 Jul 09, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7222.IH H7222 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 7222 IH with respect to the employment of all the employees 1 of the eligible employer for such calendar quarter. 2 (3) REFUNDABILITY OF EXCESS CREDIT.— 3 (A) IN GENERAL.—If the amount of the 4 credit under subsection (a) exceeds the limita- 5 tion of paragraph (2) for any calendar quarter, 6 such excess shall be treated as an overpayment 7 that shall be refunded under sections 6402(a) 8 and 6413(b) of the Internal Revenue Code of 9 1986. 10 (B) TREATMENT OF PAYMENTS.—For pur- 11 poses of section 1324 of title 31, United States 12 Code, any amounts due to an employer under 13 this paragraph shall be treated in the same 14 manner as a refund due from a credit provision 15 referred to in subsection (b)(2) of such section. 16 (c) DEFINITIONS.—For purposes of this section— 17 (1) APPLICABLE EMPLOYMENT TAXES.—The 18 term ‘‘applicable employment taxes’’ means the fol- 19 lowing: 20 (A) The taxes imposed under section 21 3111(a) of the Internal Revenue Code of 1986. 22 (B) So much of the taxes imposed under 23 section 3221(a) of such Code as are attrib- 24 VerDate Sep 11 2014 05:18 Jul 09, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7222.IH H7222 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 7222 IH utable to the rate in effect under section 1 3111(a) of such Code. 2 (2) ELIGIBLE EMPLOYER.— 3 (A) IN GENERAL.—The term ‘‘eligible em- 4 ployer’’ means any employer— 5 (i) which was carrying on a trade or 6 business at any time during calendar year 7 2020, 8 (ii) which had either— 9 (I) not more than 1,500 full time 10 equivalent employees (as determined 11 for the purposes of determining 12 whether an employer is an applicable 13 large employer for the purposes of 14 section 4980H(c)(2) of the Internal 15 Revenue Code of 1986) for calendar 16 year 2019, or 17 (II) not more than $41,500,000 18 in gross receipts in the last taxable 19 year ending in 2019, and 20 (iii) is primarily an establishment 21 classified under one of the following: 22 (I) The North American Industry 23 Classification System Sector codes 44, 24 45, 71, or 72. 25 VerDate Sep 11 2014 05:18 Jul 09, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7222.IH H7222 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 7222 IH (II) The North American Indus- 1 try Classification System Subsector 2 code 624. 3 (III) The North American Indus- 4 try Classification System codes 5 512131 or 519120. 6 (B) TAX-EXEMPT ORGANIZATIONS.—In the 7 case of an organization which is described in 8 section 501(c) of the Internal Revenue Code of 9 1986 and exempt from tax under section 501(a) 10 of such Code— 11 (i) clauses (i) and (iii)(I) of subpara- 12 graph (A) shall apply to all operations of 13 such organization, and 14 (ii) any reference in this section to 15 gross receipts shall be treated as a ref- 16 erence to gross receipts within the meaning 17 of section 6033 of the Internal Revenue 18 Code of 1986. 19 (3) QUALIFIED VIRUS TRANSMISSION PREVEN- 20 TION EXPENSES.—The term ‘‘qualified virus trans- 21 mission prevention expenses’’ means the payment or 22 accrual of any expense which is intended to reduce 23 or prevent the transmission of communicable viruses 24 (including Severe Acute Respiratory Syndrome 25 VerDate Sep 11 2014 05:18 Jul 09, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H7222.IH H7222 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 7222 IH Coronavirus 2 (SARS–CoV–2)), which is used in the 1 operation of a trade or business in the United States 2 (including the possessions of the United States), in- 3 cluding— 4 (A) barriers erected to prevent virus 5 spread between customers and employees, in- 6 cluding plexiglass installed at cashiers and 7 other counters, and partitions to separate cus- 8 tomers, 9 (B) changes to fixtures to facilitate social 10 distancing, including additional check-out sta- 11 tions, 12 (C) contactless point-of-sale systems, 13 (D) enhanced sanitation, including deep 14 cleaning and hand sanitizer, 15 (E) thermometers and other virus moni- 16 toring devices or methods, including COVID–19 17 testing, 18 (F) ventilation or air filtration, 19 (G) signage related to public health aware- 20 ness, social distancing, or altered services like 21 curbside pickups, 22 (H) employee health education, 23 (I) training for new business procedures 24 resulting from COVID–19, 25 VerDate Sep 11 2014 05:18 Jul 09, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H7222.IH H7222 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 7222 IH (J) personal protective equipment, and 1 (K) such additional expenses as the Sec- 2 retary, in consultation with the Secretary of 3 Health and Human Services, determines to be 4 necessary. 5 (4) SECRETARY.—The term ‘‘Secretary’’ means 6 the Secretary of the Treasury or the Secretary’s del- 7 egate. 8 (d) AGGREGATION RULE.—All persons treated as a 9 single employer under subsection (a) or (b) of section 52 10 of the Internal Revenue Code of 1986, or subsection (m) 11 or (o) of section 414 of such Code, shall be treated as 12 one employer for purposes of this section. 13 (e) DENIAL OF DOUBLE BENEFIT.—For purposes of 14 chapter 1 of such Code, the gross income of any eligible 15 employer, for the taxable year which includes the last day 16 of any calendar quarter with respect to which a credit is 17 allowed under this section, shall be increased by the 18 amount of such credit. 19 (f) ELECTION NOT TO HAVE SECTION APPLY.—This 20 section shall not apply with respect to any eligible em- 21 ployer for any calendar quarter if such employer elects (at 22 such time and in such manner as the Secretary may pre- 23 scribe) not to have this section apply. 24 VerDate Sep 11 2014 05:18 Jul 09, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H7222.IH H7222 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 7222 IH (g) TRANSFERS TO CERTAIN TRUST FUNDS.—There 1 are hereby appropriated to the Federal Old-Age and Sur- 2 vivors Insurance Trust Fund and the Federal Disability 3 Insurance Trust Fund established under section 201 of 4 the Social Security Act (42 U.S.C. 401) and the Social 5 Security Equivalent Benefit Account established under 6 section 15A(a) of the Railroad Retirement Act of 1974 7 (45 U.S.C. 231n–1(a)) amounts equal to the reduction in 8 revenues to the Treasury by reason of this section (without 9 regard to this subsection). Amounts appropriated by the 10 preceding sentence shall be transferred from the general 11 fund at such times and in such manner as to replicate 12 to the extent possible the transfers which would have oc- 13 curred to such Trust Fund or Account had this section 14 not been enacted. 15 (h) TREATMENT OF DEPOSITS.—The Secretary shall 16 waive any penalty under section 6656 of such Code for 17 any failure to make a deposit of applicable employment 18 taxes if the Secretary determines that such failure was due 19 to the anticipation of the credit allowed under this section. 20 (i) REGULATIONS AND GUIDANCE.—The Secretary 21 shall issue such forms, instructions, regulations, and guid- 22 ance as are necessary— 23 (1) to allow the advance payment of the credit 24 under subsection (a), subject to the limitations pro- 25 VerDate Sep 11 2014 05:18 Jul 09, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H7222.IH H7222 pbinns on DSKJLVW7X2PROD with BILLS 9 •HR 7222 IH vided in this section, based on such information as 1 the Secretary shall require, 2 (2) to provide for the reconciliation of such ad- 3 vance payment with the amount of the credit at the 4 time of filing the return of tax for the applicable 5 quarter or taxable year, 6 (3) with respect to the application of the credit 7 under subsection (a) to third-party payors (including 8 professional employer organizations, certified profes- 9 sional employer organizations, or agents under sec- 10 tion 3504 of the Internal Revenue Code of 1986), 11 including regulations or guidance allowing such 12 payors to submit documentation necessary to sub- 13 stantiate the eligible employer status of employers 14 that use such payors, 15 (4) for application of subsection (c)(2)(A)(ii) in 16 the case of any employer which was not carrying on 17 a trade or business for all or part of the same cal- 18 endar quarter in the prior year, and 19 (5) for recapturing the benefit of credits deter- 20 mined under this section in cases where there is a 21 subsequent adjustment to the credit determined 22 under subsection (a). 23 (j) APPLICATION OF SECTION.—This section shall 24 apply only to qualified fixed expenses paid or accrued in 25 VerDate Sep 11 2014 05:18 Jul 09, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H7222.IH H7222 pbinns on DSKJLVW7X2PROD with BILLS 10 •HR 7222 IH calendar quarters beginning on or after the date of the 1 enactment of this Act and before January 1, 2021. 2 Æ VerDate Sep 11 2014 05:18 Jul 09, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6301 E:\BILLS\H7222.IH H7222 pbinns on DSKJLVW7X2PROD with BILLS