II 

117TH CONGRESS 

1ST SESSION S. 477 

To amend the Internal Revenue Code of 1986 to create a refundable tax 

credit for travel expenditures, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 25, 2021 

Ms. CORTEZ MASTO (for herself and Mr. CRAMER) introduced the following 

bill; which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to create 

a refundable tax credit for travel expenditures, and for 

other purposes. 

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 ‘‘Hospitality and Com5 merce Job Recovery Act of 2021’’. 

6 SEC. 2. ESTABLISHMENT OF TAX CREDIT TO SUPPORT THE 

7 CONVENTION AND TRADE SHOW INDUSTRY. 

8 (a) IN GENERAL.—For purposes of section 38 of the 

9 Internal Revenue Code of 1986, the convention and trade 

10 show restart credit shall be treated as a credit listed at 


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1 the end of subsection (b) of such section. For purposes 

2 of this section, the convention and trade show restart cred3 it for any taxable year is an amount equal to the sum 

4 of— 

5 (1) 50 percent of the qualified participation 

6 costs paid or incurred by a taxpayer during such 

7 taxable year, and 

8 (2) in the case of an eligible provider, 100 per9 cent of the qualified restart costs paid or incurred 

10 by such provider during such taxable year. 

11 (b) QUALIFIED PARTICIPATION COSTS.—For pur12 poses of this section, the term ‘‘qualified participation 

13 costs’’ means any costs or expenses paid or incurred by 

14 the taxpayer after December 31, 2020, for any employee 

15 or officer of the taxpayer to attend or participate in a 

16 qualified event, including registration fees, lodging, and 

17 costs with respect to carrying out an exhibition relating 

18 to the taxpayer. Such term shall not include any costs 

19 which are not necessary for the attendance or participa20 tion of such employee or officer at such event. 

21 (c) ELIGIBLE PROVIDER; QUALIFIED RESTART

22 COSTS.—In this section— 

23 (1) ELIGIBLE PROVIDER.—The term ‘‘eligible 

24 provider’’ means any person which— 


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1 (A) provides facilities at which a qualified 

2 event may be held, or 

3 (B) sponsors, operates, or is otherwise re4 sponsible for the administration of a qualified 

5 event. 

6 (2) QUALIFIED RESTART COSTS.—The term 

7 ‘‘qualified restart costs’’ means any costs paid or in8 curred by an eligible provider after December 31, 

9 2020, in reopening after such date a facility de10 scribed in paragraph (1)(A) which was closed or 

11 forced to reduce services due to the virus SARS– 

12 CoV–2 or coronavirus disease 2019 (referred to in 

13 this section as ‘‘COVID–19’’), including— 

14 (A) any renovation, remediation, personal 

15 protective equipment, cleaning, or additional 

16 labor and rental costs related to preventing in17 dividuals present in such facility from con18 tracting COVID–19, and 

19 (B) any testing of employees of the tax20 payer or guests of such facility for symptoms of 

21 COVID–19. 

22 (d) QUALIFIED EVENT.— 

23 (1) IN GENERAL.—In this section, the term 

24 ‘‘qualified event’’ means— 


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1 (A) a convention, seminar, or similar meet2 ing (as such terms are used in section 274 of 

3 the Internal Revenue Code of 1986), 

4 (B) a business meeting (as such term is 

5 used in such section), or 

6 (C) a trade show, 

7 which takes place after December 31, 2021. 

8 (2) TRADE SHOW.—For purposes of this sub9 section, the term ‘‘trade show’’ means any exhibition 

10 at which different businesses within a particular in11 dustry promote their products and services. 

12 (e) DENIAL OF DOUBLE BENEFIT.—No deduction 

13 shall be allowed under any provision of chapter 1 of the 

14 Internal Revenue Code of 1986 with respect to any 

15 amount taken in account in determining the credit allowed 

16 to a taxpayer under this section. 

17 (f) LOCATION REQUIREMENT.—No credit shall be al18 lowed under this section with respect to any qualified 

19 event unless such event is held within the United States 

20 (including any territory or possession of the United 

21 States). 

22 (g) PAYROLL CREDIT FOR NONPROFIT EMPLOY23 ERS.— 

24 (1) IN GENERAL.—In the case of an organiza25 tion which is described in section 501(c) of the InVerDate Sep 11 2014 04:55 Mar 19, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S477.IS S477

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1 ternal Revenue Code of 1986 and exempt from tax 

2 under section 501(a) of such Code, the credit deter3 mined under this section shall be allowed as a credit 

4 against applicable employment taxes paid by such 

5 organization for calendar quarters in the taxable 

6 year, and not treated as a credit listed at the end 

7 of section 38(b) of such Code. 

8 (2) LIMITATIONS AND REFUNDABILITY.— 

9 (A) CREDIT LIMITED TO EMPLOYMENT

10 TAXES.—The credit allowed by paragraph (1) 

11 with respect to calendar quarters in any taxable 

12 year shall not exceed the applicable employment 

13 taxes (reduced by any credits allowed under 

14 subsections (e) and (f) of section 3111 of the 

15 Internal Revenue Code of 1986 and sections 

16 7001 and 7003 of the Families First 

17 Coronavirus Response Act) on the wages paid 

18 with respect to the employment of all the em19 ployees of the organization for such taxable 

20 year. 

21 (B) REFUNDABILITY OF EXCESS CRED22 IT.— 

23 (i) IN GENERAL.—If the amount of 

24 the credit under paragraph (1) exceeds the 

25 limitation of subparagraph (A) for any calVerDate Sep 11 2014 04:55 Mar 19, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S477.IS S477

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1 endar quarter, such excess shall be treated 

2 as an overpayment that shall be refunded 

3 under sections 6402(a) and 6413(b) of the 

4 Internal Revenue Code of 1986. 

5 (ii) TREATMENT OF PAYMENTS.—For 

6 purposes of section 1324 of title 31, 

7 United States Code, any amounts due to 

8 the employer under this paragraph shall be 

9 treated in the same manner as a refund 

10 due from a credit provision referred to in 

11 subsection (b)(2) of such section. 

12 (3) APPLICABLE EMPLOYMENT TAXES.—For 

13 purposes of this subsection, the term ‘‘applicable em14 ployment taxes’’ means the following: 

15 (A) The taxes imposed under section 

16 3111(a) of the Internal Revenue Code of 1986. 

17 (B) So much of the taxes imposed under 

18 section 3221(a) of such Code as are attrib19 utable to the rate in effect under section 

20 3111(a) of such Code. 

21 (h) REGULATIONS AND GUIDANCE.—The Secretary 

22 of the Treasury (or the Secretary’s delegate) may pre23 scribe such regulations and other guidance as may be ap24 propriate or necessary to carry out the purposes of this 

25 section. 


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1 (i) TERMINATION.—This section shall not apply to 

2 any costs paid or incurred in taxable years beginning after 

3 December 31, 2024. 

4 SEC. 3. EXTENSION OF EMPLOYEE RETENTION TAX CRED5 IT. 

6 (a) IN GENERAL.—Section 2301(m) of the CARES 

7 Act (Public Law 116–136) is amended by striking ‘‘July 

8 1, 2021’’ and inserting ‘‘January 1, 2022’’. 

9 (b) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to calendar quarters beginning 

11 after June 30, 2021. 

12 SEC. 4. SUSPENSION OF LIMITATION ON ENTERTAINMENT, 

13 ETC. EXPENSES RELATED TO TRADE OR BUSI14 NESS. 

15 (a) IN GENERAL.—Section 274 of the Internal Rev16 enue Code of 1986 is amended by adding at the end the 

17 following new subsection: 

18 ‘‘(q) SPECIAL RULES FOR TAXABLE YEARS 2021 

19 THROUGH 2022.—In the case of a taxable year beginning 

20 after December 31, 2020, and before January 1, 2023— 

21 ‘‘(1) subsection (a)(1)(A) shall not apply to any 

22 expense if the taxpayer establishes that the item was 

23 directly related to, or, in the case of an item directly 

24 preceding or following a substantial and bona fide 

25 business discussion (including business meetings at 


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1 a convention or otherwise), that such item was asso2 ciated with, the active conduct of the taxpayer’s 

3 trade or business, except that the deduction under 

4 this section with respect to any such expense shall 

5 in no event exceed the portion of such expense with 

6 respect to which the taxpayer so establishes, 

7 ‘‘(2) in the case of a club, subsection (a)(1)(B) 

8 shall not apply if the taxpayer establishes that the 

9 facility was used primarily for the furtherance of the 

10 taxpayer’s trade or business and that the item was 

11 directly related to the active conduct of such trade 

12 or business, 

13 ‘‘(3) no deduction or credit shall be allowed for 

14 any item (not including any qualified nonpersonal 

15 use vehicle (as defined in subsection (i)) with respect 

16 to an activity which is of a type generally considered 

17 to constitute entertainment, amusement, or recre18 ation, or with respect to a facility used in connection 

19 with such an activity, unless the taxpayer substan20 tiates by adequate records or by sufficient evidence 

21 corroborating the taxpayer’s own statement— 

22 ‘‘(A) the amount of such expense or other 

23 item, 


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1 ‘‘(B) the time and place of the entertain2 ment, amusement, recreation, or use of the fa3 cility or property, 

4 ‘‘(C) the business purpose of the expense 

5 or other item, and 

6 ‘‘(D) the business relationship to the tax7 payer of the persons entertained or using the 

8 facility or property, 

9 except as the Secretary may by regulations provide 

10 in the case of an expense which does not exceed an 

11 amount prescribed pursuant to such regulations, 

12 ‘‘(4) in determining the amount allowable as a 

13 deduction under this chapter for any ticket for any 

14 activity or facility described in paragraph (3), the 

15 amount taken into account shall not exceed the face 

16 value of such ticket, except that— 

17 ‘‘(A) this paragraph shall not apply to any 

18 ticket for any sports event— 

19 ‘‘(i) which is organized for the pri20 mary purpose of benefiting an organization 

21 which is described in section 501(c)(3) and 

22 exempt from tax under section 501(a), 

23 ‘‘(ii) all of the net proceeds of which 

24 are contributed to such organization, and 


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1 ‘‘(iii) which utilizes volunteers for sub2 stantially all of the work performed in car3 rying out such event, and 

4 ‘‘(B) in the case of a skybox or other pri5 vate luxury box leased for more than 1 event, 

6 the amount allowable as a deduction under this 

7 chapter with respect to such events shall not ex8 ceed the sum of the face value of non-luxury 

9 box seat tickets for the seats in such box cov10 ered by the lease (determined by treating 2 or 

11 more related leases as 1 lease), 

12 ‘‘(5) the amount allowable as a deduction under 

13 this chapter for any item with respect to an activity 

14 which is of a type generally considered to constitute 

15 entertainment, amusement, or recreation, or with re16 spect to a facility used in connection with such activ17 ity, shall not exceed 50 percent of the amount of 

18 such expense or item which would (but for this para19 graph) be allowable as a deduction under this chap20 ter, and 

21 ‘‘(6) paragraph (5) shall not apply to any ex22 pense if— 

23 ‘‘(A) such expense is described in para24 graph (2), (3), (4), (7), (8), or (9) of subsection 

25 (e), 


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1 ‘‘(B) such expense is excludable from the 

2 gross income of the recipient under section 132 

3 by reason of subsection (e) thereof (relating to 

4 de minimis fringes), or 

5 ‘‘(C) such expense is covered by a package 

6 involving a ticket described in paragraph 

7 (4)(A).’’. 

8 (b) EFFECTIVE DATE.—The amendment made by 

9 this section shall apply to taxable years beginning after 

10 December 31, 2020. 

11 SEC. 5. ESTABLISHMENT OF TAX CREDIT TO SUPPORT THE 

12 RESTAURANT INDUSTRY. 

13 (a) IN GENERAL.—For purposes of section 38 of the 

14 Internal Revenue Code of 1986, in the case of an eligible 

15 taxpayer, the restaurant and dining restart credit shall be 

16 treated as a credit listed at the end of subsection (b) of 

17 such section. For purposes of this section, the restaurant 

18 and dining restart credit for any taxable year is an amount 

19 equal to the qualified restart costs paid or incurred by the 

20 eligible taxpayer during the taxable year. 

21 (b) ELIGIBLE TAXPAYER.—For purposes of this sec22 tion, the term ‘‘eligible taxpayer’’ means a taxpayer— 

23 (1) which owns a trade or business devoted to 

24 preparation of food and beverages for on-premises 

25 consumption or carry out (not including a trade or 


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1 business which sells items other than prepared food 

2 and beverages), or 

3 (2) which owns property on which such a trade 

4 or business operates, if more than 50 percent of the 

5 square footage of such property is devoted to prepa6 ration of, and seating for on-premises consumption 

7 of, prepared meals. 

8 (c) QUALIFIED RESTART COSTS.—For purposes of 

9 this section, the term ‘‘qualified restart costs’’ means any 

10 costs paid or incurred by an eligible taxpayer on or after 

11 the date of the enactment of this Act in reopening a trade 

12 or business or property described in subsection (b), or in13 creasing meal and beverage services provided by such 

14 trade or business or at such property, which was closed 

15 or forced to reduce services due to the virus SARS–CoV– 

16 2 or coronavirus disease 2019 (referred to in this section 

17 as ‘‘COVID–19’’), including— 

18 (1) any renovation, remediation, or additional 

19 labor and rental costs related to preventing individ20 uals present at such trade or business or on such 

21 property from contracting COVID–19, and 

22 (2) any testing of employees of the eligible tax23 payer or guests of such trade or business or such 

24 property for symptoms of COVID–19. 


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1 For purposes of the preceding sentence, a trade or busi2 ness shall be treated as having reduced services if such 

3 trade or business reduced hours of operation, number of 

4 employees or employee hours, or capacity of seating areas, 

5 closed seating areas, or took any other measures which 

6 reduced services provided or operations of the trade or 

7 business as determined by the Secretary of the Treasury. 

8 (d) DENIAL OF DOUBLE BENEFIT.—No deduction 

9 shall be allowed under any provision of chapter 1 of the 

10 Internal Revenue Code of 1986 with respect to any 

11 amount taken in account in determining the credit allowed 

12 to a taxpayer under this section. 

13 (e) REGULATIONS AND GUIDANCE.—The Secretary 

14 of the Treasury (or the Secretary’s delegate) may pre15 scribe such regulations and other guidance as may be ap16 propriate or necessary to carry out the purposes of this 

17 section. 

18 (f) TERMINATION.—This section shall not apply to 

19 any costs paid or incurred in taxable years beginning after 

20 December 31, 2022. 

21 SEC. 6. CREDIT FOR TRAVEL EXPENDITURES. 

22 (a) IN GENERAL.—Subpart C of part IV of sub23 chapter A of chapter 1 of the Internal Revenue Code of 

24 1986 is amended by inserting after section 36 the fol25 lowing new section: 


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1 ‘‘SEC. 36A. CREDIT FOR TRAVEL EXPENDITURES. 

2 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in3 dividual who pays or incurs any qualified travel expenses 

4 during a taxable year, there shall be allowed as a credit 

5 against the tax imposed by this subtitle for such taxable 

6 year an amount equal to 50 percent of such expenses. 

7 ‘‘(b) LIMITATIONS.— 

8 ‘‘(1) DOLLAR LIMITATION.—The credit allowed 

9 under subsection (a) for any taxable year shall not 

10 exceed the sum of— 

11 ‘‘(A) $1,500 ($750 in the case of a mar12 ried individual filing a separate return), plus 

13 ‘‘(B) $500 for each qualifying child (as de14 fined in section 152(c)) of the individual, but 

15 not to exceed $1,500. 

16 ‘‘(2) LIMITATION BASED ON ADJUSTED GROSS

17 INCOME.— 

18 ‘‘(A) IN GENERAL.—The amount allowable 

19 as a credit under subsection (a) (after the ap20 plication of paragraph (1) and determined with21 out regard to this paragraph) for the taxable 

22 year shall be reduced (but not below zero) by 

23 $2 for every $50 by which the taxpayer’s modi24 fied adjusted gross income for such taxable year 

25 exceeds $75,000 ($150,000 in the case of a 

26 joint return). 


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1 ‘‘(B) MODIFIED ADJUSTED GROSS IN2 COME.—The term ‘modified adjusted gross in3 come’ means the adjusted gross income of the 

4 taxpayer for the taxable year increased by any 

5 amount excluded from gross income under sec6 tion 911, 931, or 933. 

7 ‘‘(c) QUALIFIED TRAVEL EXPENSE.—For purposes 

8 of this section— 

9 ‘‘(1) IN GENERAL.—The term ‘qualified travel 

10 expense’ means any amount paid or incurred for 

11 travel within the United States which is at least 50 

12 miles from the individual’s home and includes an 

13 overnight stay, including amounts paid or incurred 

14 for food and beverages, lodging, recreation, trans15 portation, amusement or entertainment, including 

16 live entertainment and sporting events, and gasoline. 

17 ‘‘(2) MINIMUM AMOUNT.—Any expense (deter18 mined by treating all items on a single receipt as 1 

19 expense) which is less than $25 shall not be taken 

20 into account under paragraph (1). 

21 ‘‘(3) UNITED STATES.—The term ‘United 

22 States’ includes the territories and possessions of the 

23 United States. 

24 ‘‘(4) EXCEPTION.—For purposes of paragraph 

25 (1), amounts paid with respect to a residence or 


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1 other lodging owned by the individual shall not be 

2 treated as qualified travel expenses. 

3 ‘‘(d) ELECTION TO CARRY CREDIT TO PRECEDING

4 YEAR.—At the election of the taxpayer, any credit allow5 able under this section for a taxable year may be carried 

6 back (in its entirety) to the preceding taxable year and 

7 treated as a credit allowed under this subpart for such 

8 year. 

9 ‘‘(e) RESTRICTIONS.—No credit shall be allowed to 

10 an individual under subsection (a) with respect to a quali11 fied travel expense if— 

12 ‘‘(1) the individual receives a refund or reim13 bursement from any person for the expense, 

14 ‘‘(2) a deduction is allowed under section 162 

15 with respect to the expense, 

16 ‘‘(3) a deduction under section 151 with respect 

17 to individual is allowable to another taxpayer for 

18 such taxable year, or 

19 ‘‘(4) the individual does not attach sufficient 

20 evidence of the expense, as prescribed by the Sec21 retary, to the return of tax for such taxable year. 

22 ‘‘(f) TERMINATION.—This section shall not apply to 

23 any qualified travel expenses paid or incurred after De24 cember 31, 2023.’’. 


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

2 for subpart C of part IV of subchapter A of chapter 1 

3 of the Internal Revenue Code of 1986 is amended by in4 serting after the item relating to section 36 the following 

5 new item: 

6 (c) CONFORMING AMENDMENT.—Section 

7 6211(b)(4)(A) of the Internal Revenue Code of 1986 is 

8 amended by inserting ‘‘, 36A’’ after ‘‘36’’. 

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

10 this section shall apply to amounts paid or incurred after 

11 December 31, 2020. 

12 SEC. 7. ESTABLISHMENT OF TEMPORARY TAX CREDIT FOR 

13 UNMERCHANTABLE INVENTORY. 

14 (a) IN GENERAL.—For purposes of section 38 of the 

15 Internal Revenue Code of 1986, in the case of an eligible 

16 taxpayer, the unmerchantable inventory credit shall be 

17 treated as a credit listed at the end of subsection (b) of 

18 such section. For purposes of this subsection, the 

19 unmerchantable inventory credit for any taxable year be20 ginning after December 31, 2019, and ending before April 

21 1, 2021, shall be equal to 90 percent of the qualified 

22 unmerchantable inventory costs incurred by the eligible 

23 taxpayer during such taxable year. 


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1 (b) ELIGIBLE TAXPAYER.—For purposes of this sec2 tion, the term ‘‘eligible taxpayer’’ means any taxpayer 

3 which— 

4 (1) on March 13, 2020, was engaged in an ac5 tive trade or business of selling food or beverage in6 ventory as a manufacturer, importer, wholesale dis7 tributor, or retailer, and 

8 (2) with respect to such trade or business— 

9 (A) on or after March 13, 2020, held 

10 qualified unmerchantable inventory, or 

11 (B) incurred costs described in subsection 

12 (c)(1)(A)(i). 

13 (c) QUALIFIED UNMERCHANTABLE INVENTORY

14 COSTS.— 

15 (1) IN GENERAL.—For purposes of this section, 

16 the qualified unmerchantable inventory costs in17 curred by an eligible taxpayer during any taxable 

18 year shall be equal to— 

19 (A) an amount equal to the sum of— 

20 (i) any costs described in section 

21 263A(a)(2) of the Internal Revenue Code 

22 of 1986 with respect to the purchase or ac23 quisition of any qualified unmerchantable 

24 inventory during such taxable year, 


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1 (ii) any costs relating to disposal or 

2 destruction of any qualified unmerchant3 able inventory during such taxable year, 

4 and 

5 (iii) any amount paid or credited by 

6 such eligible taxpayer during such taxable 

7 year to any other person for purposes of 

8 apportioning or sharing costs relating to 

9 products which, in the hands of such eligi10 ble taxpayer, would be deemed to be quali11 fied unmerchantable inventory, minus 

12 (B) an amount equal to the sum of— 

13 (i) any amount received by such eligi14 ble taxpayer during such taxable year from 

15 any other person for purposes of appor16 tioning or sharing costs with respect to 

17 qualified unmerchantable inventory, 

18 (ii) any amounts compensated by in19 surance for any loss sustained by such eli20 gible taxpayer during such taxable year 

21 with respect to qualified unmerchantable 

22 inventory, and 

23 (iii) any amounts received under the 

24 Coronavirus Food Assistance Program 


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1 under part 9 of title 7, Code of Federal 

2 Regulations (or successor regulations). 

3 (2) DIRECT COSTS FOR MANUFACTURERS.—In 

4 the case of a manufacturer, the costs described in 

5 paragraph (1)(A)(i) shall include any transportation 

6 costs which would not otherwise have been capital7 ized pursuant to section 263A of the Internal Rev8 enue Code of 1986. 

9 (d) QUALIFIED UNMERCHANTABLE INVENTORY.— 

10 (1) IN GENERAL.—For purposes of this section, 

11 the term ‘‘qualified unmerchantable inventory’’ 

12 means any food or beverage inventory which— 

13 (A) was manufactured or acquired by the 

14 eligible taxpayer, and 

15 (B) became unmerchantable during the pe16 riod beginning on March 13, 2020, and ending 

17 on September 30, 2020. 

18 (2) UNMERCHANTABLE.—For purposes of this 

19 subsection, the term ‘‘unmerchantable’’ shall include 

20 any food or beverage products which cannot be sold 

21 due to— 

22 (A) spoilage, 

23 (B) expiration pursuant to the manufac24 turer code date or applicable industry freshness 

25 standards, or 


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1 (C) a change or limitation in market condi2 tions resulting in the lack of a customary and 

3 reasonable market for such products. 

4 (e) ELECTION TO HAVE CREDIT NOT APPLY.— 

5 (1) IN GENERAL.—A taxpayer may elect to 

6 have this section not apply for any taxable year. 

7 (2) TIME FOR MAKING ELECTION.—An election 

8 under paragraph (1) for any taxable year may be 

9 made (or revoked) at any time before the expiration 

10 of the 3-year period beginning on the last date pre11 scribed by law for filing the return for such taxable 

12 year (determined without regard to extensions). 

13 (3) MANNER OF MAKING ELECTION.—An elec14 tion under paragraph (1) (or revocation thereof) 

15 shall be made in such manner as the Secretary of 

16 the Treasury, or the Secretary’s delegate, may by 

17 regulations prescribe. 

18 (f) DENIAL OF DOUBLE BENEFIT.—No deduction 

19 shall be allowed under any provision of chapter 1 of the 

20 Internal Revenue Code of 1986 with respect to any 

21 amount taken in account in determining the credit allowed 

22 to a taxpayer under this section. 

Æ 


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