ENCORES Act

I 116TH CONGRESS 2D SESSION H. R. 7735 To provide a tax credit to live event venues that provided refunds on tickets for events that were cancelled due to the coronavirus pandemic. IN THE HOUSE OF REPRESENTATIVES JULY 23, 2020 Mr. KIND (for himself and Mr. KELLY of Pennsylvania) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To provide a tax credit to live event venues that provided refunds on tickets for events that were cancelled due to the coronavirus pandemic. 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 ‘‘Entertainments New 4 Credit Opportunity for Relief & Economic Sustainability 5 Act’’ or the ‘‘ENCORES Act’’. 6 SEC. 2. ESTABLISHMENT OF TAX CREDIT FOR TICKET RE- 7 FUNDS ISSUED BY LIVE EVENT VENUES. 8 (a) IN GENERAL.—Subject to subsections (b) and (c), 9 for purposes of section 38 of the Internal Revenue Code 10 VerDate Sep 11 2014 19:30 Aug 14, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7735.IH H7735 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 7735 IH of 1986, in the case of an eligible entity, the live event 1 refund credit shall be treated as a credit listed at the end 2 of subsection (b) of such section. For purposes of this sub- 3 section, the live event refund credit shall be an amount 4 equal to 50 percent of any qualified ticket refund made 5 by the eligible entity during the period— 6 (1) beginning on January 31, 2020, and 7 (2) ending on the date of enactment of this Act. 8 (b) LIMITED CARRYBACK OF CREDIT.—In the case 9 of the live event refund credit allowed under subsection 10 (a)— 11 (1) at the election of the eligible entity— 12 (A) such credit shall not be applied to the 13 taxable year in which the qualified ticket re- 14 funds were made by such taxpayer and the 15 amount of the credit with respect to such re- 16 funds shall be reduced to zero for such taxable 17 year, and 18 (B) the amount of such credit shall be a 19 live event refund credit carryback to either of 20 the 2 taxable years preceding such taxable year, 21 and 22 (2) section 39 of the Internal Revenue Code of 23 1986 shall not apply with respect to such credit. 24 VerDate Sep 11 2014 01:25 Aug 15, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7735.IH H7735 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 7735 IH (c) CREDIT MADE AVAILABLE TO TAX EXEMPT EN- 1 TITIES.— 2 (1) IN GENERAL.—In the case of an eligible en- 3 tity which is an organization described in section 4 501(c) of the Internal Revenue Code of 1986 which 5 is exempt from taxation under section 501(a) of 6 such Code, there shall be treated as a credit allow- 7 able under subpart C of part IV of subchapter A of 8 chapter 1 of such Code (and not allowable under 9 subpart D of such part) the lesser of— 10 (A) the amount of the credit determined 11 under subsection (a) with respect to such enti- 12 ty, or 13 (B) the amount of the payroll taxes (as de- 14 fined in section 45R(f)(3) of such Code) of such 15 entity during the calendar year in which the 16 taxable year begins, as determined without re- 17 gard to any credit against such taxes. 18 (2) LIMITED CARRYBACK.—Rules similar to 19 subsection (b)(1) shall apply for purposes of this 20 subsection. 21 (d) DEFINITIONS.—For purposes of this section— 22 (1) ELIGIBLE ENTITY.— 23 VerDate Sep 11 2014 19:30 Aug 14, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7735.IH H7735 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 7735 IH (A) IN GENERAL.—The term ‘‘eligible enti- 1 ty’’ means a person engaged in a trade or busi- 2 ness which— 3 (i) includes— 4 (I) organizing, promoting, pro- 5 ducing, or managing live events, and 6 (II) the sale to members of the 7 general public (directly or through a 8 third party) of tickets to attend such 9 events, and 10 (ii) for the preceding taxable year, 11 had an average number of full-time equiva- 12 lent employees (as defined in section 13 45R(d)(2) of the Internal Revenue Code of 14 1986) which is equal to or less than 500. 15 (B) AGGREGATION RULE.—All persons 16 treated as a single employer under subsection 17 (b), (c), (m), or (o) of section 414 of the Inter- 18 nal Revenue Code of 1986 shall be treated as 19 a single taxpayer for purposes of subparagraph 20 (A). 21 (C) EXCLUSION.—The term ‘‘eligible enti- 22 ty’’ shall not include any person engaged in 23 professional football, basketball, baseball, or 24 other professional sport. 25 VerDate Sep 11 2014 19:30 Aug 14, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7735.IH H7735 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 7735 IH (2) LIVE EVENT.—The term ‘‘live event’’ means 1 any live concert, comedy show, sporting event, or 2 theatrical production for which tickets were made 3 available to members of the general public by the eli- 4 gible entity not less than 6 weeks prior to such con- 5 cert, show, event, or production. 6 (3) QUALIFIED TICKET REFUND.—The term 7 ‘‘qualified ticket refund’’ means any refund paid by 8 the eligible entity to an individual who purchased a 9 ticket which entitled such individual to attend a live 10 event which was cancelled or postponed due to the 11 virus SARS–CoV–2 or coronavirus disease 2019 12 (COVID–19), provided that— 13 (A) the eligible entity made a good faith 14 effort to offer such individual the option to re- 15 ceive a voucher or discount for any live event at 16 a later date in an amount which was equal to 17 or greater than the price paid by such indi- 18 vidual for such ticket, and 19 (B) such individual elected to receive a re- 20 fund. 21 (4) OTHER TERMS.—Except as otherwise pro- 22 vided under this subsection, any term used in this 23 section which is also used in chapter 1 of the Inter- 24 VerDate Sep 11 2014 19:30 Aug 14, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H7735.IH H7735 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 7735 IH nal Revenue Code of 1986 shall have the meaning 1 given such term under such chapter. 2 (e) DENIAL OF DOUBLE BENEFIT.—No deduction 3 shall be allowed under any provision of chapter 1 of the 4 Internal Revenue Code of 1986 with respect to any 5 amount taken in account in determining the credit allowed 6 to a taxpayer under this section. 7 (f) REGULATIONS AND GUIDANCE.—The Secretary of 8 the Treasury (or the Secretary’s delegate) may prescribe 9 such regulations and other guidance as may be appro- 10 priate or necessary to carry out the purposes of this sec- 11 tion. 12 Æ VerDate Sep 11 2014 19:30 Aug 14, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H7735.IH H7735 pamtmann on DSKBC07HB2PROD with BILLS