I 

114TH CONGRESS 

1ST SESSION H. R. 4039 

To amend the Internal Revenue Code of 1986 to establish a small business 

start-up tax credit for veterans. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 17, 2015 

Ms. ADAMS (for herself, Ms. JUDY CHU of California, Ms. KELLY of Illinois, 

Mrs. LAWRENCE, Mr. PAYNE, Mr. TAKAI, and Ms. VELA ́ZQUEZ) 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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Veteran Small Busi5 ness Tax Credit Act of 2015’’. 

6 SEC. 2. VETERAN SMALL BUSINESS START-UP CREDIT. 

7 (a) IN GENERAL.—Subpart D of part IV of sub8 chapter A of chapter 1 of the Internal Revenue Code of 


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1 1986 is amended by adding at the end the following new 

2 section: 

3 ‘‘SEC. 45S. VETERAN SMALL BUSINESS START-UP CREDIT. 

4 ‘‘(a) IN GENERAL.—For purposes of section 38, in 

5 the case of an applicable veteran-owned business which 

6 elects the application of this section, the veteran small 

7 business start-up credit determined under this section for 

8 any taxable year is an amount equal to 15 percent of so 

9 much of the qualified start-up expenditures of the tax10 payer as does not exceed $80,000. 

11 ‘‘(b) APPLICABLE VETERAN-OWNED SMALL BUSI12 NESS.—For purposes of this section— 

13 ‘‘(1) IN GENERAL.—The term ‘applicable vet14 eran-owned small business’ means a small business 

15 controlled by one or more qualified veterans. 

16 ‘‘(2) QUALIFIED VETERAN.—The term ‘quali17 fied veteran’ means any individual (or the spouse or 

18 surviving spouse of such an individual) who— 

19 ‘‘(A) has served on active duty in the 

20 Armed Forces of the United States, and 

21 ‘‘(B) who has not been discharged or re22 leased from the Armed Forces of the United 

23 States under dishonorable conditions. 

24 ‘‘(3) CONTROL.—The term ‘controlled’ means— 


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1 ‘‘(A) management and operation of the 

2 daily business, and— 

3 ‘‘(B)(i) in the case of a sole proprietorship, 

4 sole ownership, 

5 ‘‘(ii) in the case of a corporation, owner6 ship (by vote or value) of not less than 51 per7 cent of the stock in such corporation, or 

8 ‘‘(iii) in the case of a partnership or joint 

9 venture, ownership of not less than 51 percent 

10 of the profits interests or capital interests in 

11 such partnership or joint venture. 

12 ‘‘(4) SMALL BUSINESS.—The term ‘small busi13 ness’ means, with respect to any taxable year, any 

14 person engaged in a trade or business in the United 

15 States if— 

16 ‘‘(A) the gross receipts of such person for 

17 the preceding taxable year did not exceed 

18 $5,000,000, or 

19 ‘‘(B) in the case of a person to which sub20 paragraph (A) does not apply, such person em21 ployed not more than 100 full-time employees 

22 during the preceding taxable year. 

23 For purposes of subparagraph (B), an employee 

24 shall be considered full-time if such employee is emVerDate Sep 11 2014 06:02 Nov 20, 2015 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4039.IH H4039

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1 ployed at least 30 hours per week for 20 or more 

2 calendar weeks in the taxable year. 

3 ‘‘(c) QUALIFIED START-UP EXPENDITURES.—For 

4 purposes of this section— 

5 ‘‘(1) IN GENERAL.—The term ‘qualified start6 up expenditures’ means— 

7 ‘‘(A) any start-up expenditures (as defined 

8 in section 195(c)), or 

9 ‘‘(B) any amounts paid or incurred during 

10 the taxable year for the purchase or lease of 

11 real property, or the purchase of personal prop12 erty, placed in service during the taxable year 

13 and used in the active conduct of a trade or 

14 business. 

15 ‘‘(d) SPECIAL RULES.—For purposes of this sec16 tion— 

17 ‘‘(1) YEAR OF ELECTION.—The taxpayer may 

18 elect the application of this section only for the first 

19 2 taxable years for which ordinary and necessary ex20 penses paid or incurred in carrying on such trade or 

21 business are allowable as a deduction by the tax22 payer under section 162. 

23 ‘‘(2) CONTROLLED GROUPS AND COMMON CON24 TROL.—All persons treated as a single employer 


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1 under subsections (a) and (b) of section 52 shall be 

2 treated as 1 person. 

3 ‘‘(3) NO DOUBLE BENEFIT.—If a credit is de4 termined under this section with respect to any 

5 property, the basis of such property shall be reduced 

6 by the amount of the credit attributable to such 

7 property.’’. 

8 (b) CLERICAL AMENDMENT.—The table of sections 

9 for subpart D of part IV of subchapter A of chapter 1 

10 of such Code is amended by adding at the end the fol11 lowing new item: 

‘‘Sec. 45S. Veteran small business start-up credit.’’. 

12 (c) MADE PART OF GENERAL BUSINESS CREDIT.— 

13 Section 38(b) of such Code is amended by striking ‘‘plus’’ 

14 at the end of paragraph (35), by striking the period at 

15 the end of paragraph (36) and inserting ‘‘, plus’’, and by 

16 adding at the end the following new paragraph: 

17 ‘‘(37) the veteran small business start-up credit 

18 determined under section 45S.’’. 

19 (d) EFFECTIVE DATE.—The amendments made by 

20 this section shall apply to taxable years beginning after 

21 December 31, 2016. 

Æ 


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