Veterans Jobs Opportunity Act

I 118TH CONGRESS 1ST SESSION H. R. 3084 To amend the Internal Revenue Code of 1986 to establish a small business start-up tax credit for veterans creating businesses in underserved com- munities. IN THE HOUSE OF REPRESENTATIVES MAY 5, 2023 Mr. DAVIS of North Carolina (for himself and Mr. NUNN of Iowa) 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 establish a small business start-up tax credit for veterans creating businesses in underserved communities. 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 ‘‘Veterans Jobs Oppor- 4 tunity Act’’. 5 SEC. 2. VETERAN SMALL BUSINESS START-UP CREDIT. 6 (a) IN GENERAL.—Subpart D of part IV of sub- 7 chapter A of chapter 1 of the Internal Revenue Code of 8 VerDate Sep 11 2014 22:26 May 16, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3084.IH H3084 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •HR 3084 IH 1986 is amended by adding at the end the following new 1 section: 2 ‘‘SEC. 45BB. VETERAN SMALL BUSINESS START-UP CREDIT. 3 ‘‘(a) IN GENERAL.—For purposes of section 38, the 4 veteran small business start-up credit determined under 5 this section for any taxable year is an amount equal to 6 15 percent of so much of the qualified start-up expendi- 7 tures paid or incurred by the taxpayer during such taxable 8 year with respect to an applicable veteran-owned business 9 as does not exceed $50,000. 10 ‘‘(b) DEFINITIONS.—For purposes of this section— 11 ‘‘(1) APPLICABLE VETERAN-OWNED SMALL 12 BUSINESS.—The term ‘applicable veteran-owned 13 small business’ means a small business— 14 ‘‘(A) owned and controlled by 1 or more 15 veterans or spouses of veterans, and 16 ‘‘(B) the principal place of business of 17 which is in an underserved community. 18 ‘‘(2) OWNERSHIP AND CONTROL.—The term 19 ‘owned and controlled’ means— 20 ‘‘(A) with respect to any of the individuals 21 described in paragraph (1)(A), that the conduct 22 of any trade or business of the small business 23 is not a passive activity (as defined in section 24 469(c)), and 25 VerDate Sep 11 2014 22:26 May 16, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3084.IH H3084 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •HR 3084 IH ‘‘(B) with respect to the small business— 1 ‘‘(i) such small business is a sole pro- 2 prietorship, 3 ‘‘(ii) if such small business is a cor- 4 poration, ownership (by vote or value) by 5 the individuals described in paragraph 6 (1)(A) of greater than 50 percent of the 7 stock in such corporation, or 8 ‘‘(iii) if such small business is a part- 9 nership, ownership by the individuals de- 10 scribed in paragraph (1)(A) of greater 11 than 50 percent of the profits interests or 12 capital interests in such partnership. 13 ‘‘(3) QUALIFIED START-UP EXPENDITURES.— 14 The term ‘qualified start-up expenditures’ means— 15 ‘‘(A) any start-up expenditures (as defined 16 in section 195(c)), and 17 ‘‘(B) any amounts paid or incurred during 18 the taxable year for the purchase or lease of 19 real property, or the purchase of personal prop- 20 erty, placed in service during the taxable year 21 and used in the active conduct of a trade or 22 business. 23 ‘‘(4) SMALL BUSINESS.— 24 VerDate Sep 11 2014 22:26 May 16, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3084.IH H3084 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •HR 3084 IH ‘‘(A) IN GENERAL.—The term ‘small busi- 1 ness’ means, with respect to any taxable year, 2 any person engaged in a trade or business in 3 the United States if— 4 ‘‘(i) the gross receipts of such person 5 for the preceding taxable year did not ex- 6 ceed $5,000,000, or 7 ‘‘(ii) in the case of a person to which 8 clause (i) does not apply, such person em- 9 ployed not more than 50 full-time employ- 10 ees during the preceding taxable year. 11 ‘‘(B) FULL-TIME EMPLOYEE.—For pur- 12 poses of subparagraph (A)(ii), an employee 13 shall be considered full-time if such employee is 14 employed at least 30 hours per week for 20 or 15 more calendar weeks in the taxable year. 16 ‘‘(5) UNDERSERVED COMMUNITY.—The term 17 ‘underserved community’ means any area located 18 within— 19 ‘‘(A) a HUBZone (as defined in section 20 3(p) of the Small Business Act (15 U.S.C. 21 632(p)), as in effect on the date of enactment 22 of this section), 23 ‘‘(B) an empowerment zone, or enterprise 24 community, designated under section 1391 (and 25 VerDate Sep 11 2014 22:26 May 16, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3084.IH H3084 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •HR 3084 IH without regard to whether or not such designa- 1 tion remains in effect), 2 ‘‘(C) an area of low income or moderate in- 3 come (as recognized by the Federal Financial 4 Institutions Examination Council), or 5 ‘‘(D) a county with persistent poverty (as 6 classified by the Economic Research Service of 7 the Department of Agriculture). 8 ‘‘(6) VETERAN OR SPOUSE OF VETERAN.—The 9 term ‘veteran or spouse of a veteran’ has the mean- 10 ing given such term by section 7(a)(31)(G)(ii) of the 11 Small Business Act (15 U.S.C. 636(a)(31)(G)(ii), as 12 in effect on the date of enactment of this section). 13 ‘‘(c) SPECIAL RULES.—For purposes of this sec- 14 tion— 15 ‘‘(1) ELECTION TO TAKE CREDIT.—No credit 16 shall be allowed under subsection (a) for any ex- 17 penditures unless the taxpayer elects to have this 18 section apply to such expenditures. 19 ‘‘(2) YEAR OF ELECTION.—The taxpayer may 20 elect the application of this section only for the first 21 2 taxable years for which ordinary and necessary ex- 22 penses paid or incurred in carrying on such trade or 23 business are allowable as a deduction by the tax- 24 payer under section 162. 25 VerDate Sep 11 2014 22:26 May 16, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3084.IH H3084 pbinns on DSKJLVW7X2PROD with $$_JOB 6 •HR 3084 IH ‘‘(3) CONTROLLED GROUPS AND COMMON CON- 1 TROL.—All persons treated as a single employer 2 under subsections (a) and (b) of section 52 shall be 3 treated as 1 person. 4 ‘‘(4) NO DOUBLE BENEFIT.—If a credit is de- 5 termined under this section with respect to any 6 property, the basis of such property shall be reduced 7 by the amount of the credit attributable to such 8 property.’’. 9 (b) CLERICAL AMENDMENT.—The table of sections 10 for subpart D of part IV of subchapter A of chapter 1 11 of the Internal Revenue Code of 1986 is amended by add- 12 ing at the end the following new item: 13 ‘‘Sec. 45BB. Veteran small business start-up credit.’’. (c) PART OF GENERAL BUSINESS CREDIT.—Section 14 38(b) of such Code is amended by striking ‘‘plus’’ at the 15 end of paragraph (40), by striking the period at the end 16 of paragraph (41) and inserting ‘‘plus’’, and by adding 17 at the end the following new paragraph: 18 ‘‘(42) the veteran small business start-up credit 19 determined under section 45BB.’’. 20 (d) REPORT BY TREASURY INSPECTOR GENERAL 21 FOR TAX ADMINISTRATION.—Every fourth year after the 22 date of the enactment of this Act, the Treasury Inspector 23 General for Tax Administration shall include in one of the 24 semiannual reports under section 5 of the Inspector Gen- 25 VerDate Sep 11 2014 22:26 May 16, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3084.IH H3084 pbinns on DSKJLVW7X2PROD with $$_JOB 7 •HR 3084 IH eral Act of 1978 with respect to such year, an evaluation 1 of the credit allowed under section 45BB of the Internal 2 Revenue Code of 1986 (as added by this section), includ- 3 ing an evaluation of the success of, and accountability with 4 respect to, such credit. 5 (e) EFFECTIVE DATE.—The amendments made by 6 this section shall apply to taxable years beginning after 7 the date of the enactment of this Act. 8 Æ VerDate Sep 11 2014 22:26 May 16, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\H3084.IH H3084 pbinns on DSKJLVW7X2PROD with $$_JOB