I 

114TH CONGRESS 

1ST SESSION H. R. 3950 

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

start-up tax credit for veterans who have served overseas. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 5, 2015 

Ms. ADAMS (for herself, Mr. TAKAI, Ms. KELLY of Illinois, Mrs. LAWRENCE, 

Ms. VELA ́ZQUEZ, Mr. PAYNE, and Ms. JUDY CHU of California) 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 who 

have served overseas. 

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 


tkelley on DSK3SPTVN1PROD with BILLS
2 

•HR 3950 IH

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) at any time in the course of such 

22 service, was stationed outside of the United 

23 States. 


tkelley on DSK3SPTVN1PROD with BILLS
3 

•HR 3950 IH

1 Such term shall not include any individual who was 

2 discharged or released from the Armed Forces of the 

3 United States under dishonorable conditions. 

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

5 ‘‘(A) management and operation of the 

6 daily business, and 

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

8 sole ownership, 

9 ‘‘(ii) in the case of a corporation, owner10 ship (by vote or value) of not less than 51 per11 cent of the stock in such corporation, or 

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

13 venture, ownership of not less than 51 percent 

14 of the profits interests or capital interests in 

15 such partnership or joint venture. 

16 ‘‘(4) SMALL BUSINESS.—The term ‘small busi17 ness’ means, with respect to any taxable year, any 

18 person engaged in a trade or business in the United 

19 States if— 

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

21 the preceding taxable year did not exceed 

22 $5,000,000, or 

23 ‘‘(B) in the case of a person to which sub24 paragraph (A) does not apply, such person emVerDate Sep 11 2014 04:37 Nov 10, 2015 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3950.IH H3950

tkelley on DSK3SPTVN1PROD with BILLS
4 

•HR 3950 IH

1 ployed not more than 100 full-time employees 

2 during the preceding taxable year. 

3 For purposes of subparagraph (B), an employee 

4 shall be considered full-time if such employee is em5 ployed at least 30 hours per week for 20 or more 

6 calendar weeks in the taxable year. 

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

8 purposes of this section— 

9 ‘‘(1) IN GENERAL.—The term ‘qualified start10 up expenditures’ means— 

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

12 in section 195(c)), or 

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

14 the taxable year for the purchase or lease of 

15 real property, or the purchase of personal prop16 erty, placed in service during the taxable year 

17 and used in the active conduct of a trade or 

18 business. 

19 ‘‘(d) SPECIAL RULES.—For purposes of this sec20 tion— 

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

22 elect the application of this section only for the first 

23 2 taxable years for which ordinary and necessary ex24 penses paid or incurred in carrying on such trade or 


tkelley on DSK3SPTVN1PROD with BILLS
5 

•HR 3950 IH

1 business are allowable as a deduction by the tax2 payer under section 162. 

3 ‘‘(2) CONTROLLED GROUPS AND COMMON CON4 TROL.—All persons treated as a single employer 

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

6 treated as 1 person. 

7 ‘‘(3) NO DOUBLE BENEFIT.—If a credit is de8 termined under this section with respect to any 

9 property, the basis of such property shall be reduced 

10 by the amount of the credit attributable to such 

11 property.’’. 

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

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

14 of such Code is amended by adding at the end the fol15 lowing new item: 

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

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

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

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

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

20 adding at the end the following new paragraph: 

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

22 determined under section 45S.’’. 


tkelley on DSK3SPTVN1PROD with BILLS
6 

•HR 3950 IH

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

2 this section shall apply to taxable years beginning after 

3 December 31, 2016. 

Æ 


tkelley on DSK3SPTVN1PROD with BILLS