S Corp Access to Crowdfunding Act

I 116TH CONGRESS 2D SESSION H. R. 8985 To amend the Internal Revenue Code of 1986 to make an exception to the 100 shareholder S corporation limitation in the case of shareholders whose shares were acquired through certain crowdfunding or small public offerings. IN THE HOUSE OF REPRESENTATIVES DECEMBER 16, 2020 Mr. HILL of Arkansas (for himself and Mr. SCHWEIKERT) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to make an exception to the 100 shareholder S corporation limita- tion in the case of shareholders whose shares were ac- quired through certain crowdfunding or small public of- ferings. 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 ‘‘S Corp Access to 4 Crowdfunding Act’’. 5 VerDate Sep 11 2014 22:10 Jan 08, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H8985.IH H8985 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 8985 IH SEC. 2. EXCEPTION TO S CORPORATION SHAREHOLDER 1 LIMITATION IN CASE OF CROWDFUNDING 2 AND SMALL PUBLIC OFFERINGS. 3 (a) IN GENERAL.—Section 1361(c) of the Internal 4 Revenue Code of 1986 is amended by adding at the end 5 the following new paragraph: 6 ‘‘(7) TREATMENT OF SHARES ACQUIRED 7 THROUGH CROWDFUNDING AND SMALL PUBLIC OF- 8 FERINGS.—The number of shareholders of the cor- 9 poration shall be determined under subsection 10 (b)(1)(A) without regard to any individual who has 11 only acquired shares in the corporation through— 12 ‘‘(A) a public offering that meets the terms 13 and conditions set forth in Regulation A pro- 14 mulgated by the Securities and Exchange Com- 15 mission (17 C.F.R. 230.251 et seq.), or 16 ‘‘(B) one or more transactions described in 17 section 4(a)(6) of the Securities Act of 1933 18 (15 U.S.C. 77d(a)(6)).’’. 19 (b) EFFECTIVE DATE.—The amendment made by 20 this section shall apply to taxable years beginning after 21 the date of the enactment of this Act. 22 Æ VerDate Sep 11 2014 22:10 Jan 08, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6301 E:\BILLS\H8985.IH H8985 pbinns on DSKJLVW7X2PROD with BILLS