II 

118TH CONGRESS 

2D SESSION S. 4856 

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

start-up tax credit for veterans creating businesses in underserved communities. 

IN THE SENATE OF THE UNITED STATES 

JULY 30, 2024 

Ms. ROSEN (for herself and Mr. MORAN) 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 establish 

a small business start-up tax credit for veterans creating 

businesses in underserved communities. 

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 ‘‘Veterans Jobs Oppor5 tunity Act’’. 

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. 45BB. VETERAN SMALL BUSINESS START-UP CREDIT. 

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

5 veteran small business start-up credit determined under 

6 this section for any taxable year is an amount equal to 

7 15 percent of so much of the qualified start-up expendi8 tures paid or incurred by the taxpayer during such taxable 

9 year with respect to an applicable veteran-owned business 

10 as does not exceed $50,000. 

11 ‘‘(b) DEFINITIONS.—For purposes of this section— 

12 ‘‘(1) APPLICABLE VETERAN-OWNED SMALL

13 BUSINESS.—The term ‘applicable veteran-owned 

14 small business’ means a small business— 

15 ‘‘(A) owned and controlled by 1 or more 

16 veterans or spouses of veterans, and 

17 ‘‘(B) the principal place of business of 

18 which is in an underserved community. 

19 ‘‘(2) OWNERSHIP AND CONTROL.—The term 

20 ‘owned and controlled’ means— 

21 ‘‘(A) with respect to any of the individuals 

22 described in paragraph (1)(A), that the conduct 

23 of any trade or business of the small business 

24 is not a passive activity (as defined in section 

25 469(c)), and 


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1 ‘‘(B) with respect to the small business— 

2 ‘‘(i) such small business is a sole pro3 prietorship, 

4 ‘‘(ii) if such small business is a cor5 poration, ownership (by vote or value) by 

6 the individuals described in paragraph 

7 (1)(A) of greater than 50 percent of the 

8 stock in such corporation, or 

9 ‘‘(iii) if such small business is a part10 nership, ownership by the individuals de11 scribed in paragraph (1)(A) of greater 

12 than 50 percent of the profits interests or 

13 capital interests in such partnership. 

14 ‘‘(3) QUALIFIED START-UP EXPENDITURES.— 

15 The term ‘qualified start-up expenditures’ means— 

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

17 in section 195(c)), and 

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

19 the taxable year for the purchase or lease of 

20 real property, or the purchase of personal prop21 erty, placed in service during the taxable year 

22 and used in the active conduct of a trade or 

23 business. 

24 ‘‘(4) SMALL BUSINESS.— 


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1 ‘‘(A) IN GENERAL.—The term ‘small busi2 ness’ means, with respect to any taxable year, 

3 any person engaged in a trade or business in 

4 the United States if— 

5 ‘‘(i) the gross receipts of such person 

6 for the preceding taxable year did not ex7 ceed $5,000,000, or 

8 ‘‘(ii) in the case of a person to which 

9 clause (i) does not apply, such person em10 ployed not more than 50 full-time employ11 ees during the preceding taxable year. 

12 ‘‘(B) FULL-TIME EMPLOYEE.—For pur13 poses of subparagraph (A)(ii), an employee 

14 shall be considered full-time if such employee is 

15 employed at least 30 hours per week for 20 or 

16 more calendar weeks in the taxable year. 

17 ‘‘(5) UNDERSERVED COMMUNITY.—The term 

18 ‘underserved community’ means any area located 

19 within— 

20 ‘‘(A) a HUBZone (as defined in section 

21 3(p) of the Small Business Act (15 U.S.C. 

22 632(p)), as in effect on the date of enactment 

23 of this section), 

24 ‘‘(B) an empowerment zone, or enterprise 

25 community, designated under section 1391 (and 


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1 without regard to whether or not such designa2 tion remains in effect), 

3 ‘‘(C) an area of low income or moderate in4 come (as recognized by the Federal Financial 

5 Institutions Examination Council), or 

6 ‘‘(D) a county with persistent poverty (as 

7 classified by the Economic Research Service of 

8 the Department of Agriculture). 

9 ‘‘(6) VETERAN OR SPOUSE OF VETERAN.—The 

10 term ‘veteran or spouse of a veteran’ has the mean11 ing given such term by section 7(a)(31)(G)(ii) of the 

12 Small Business Act (15 U.S.C. 636(a)(31)(G)(ii), as 

13 in effect on the date of enactment of this section). 

14 ‘‘(c) SPECIAL RULES.—For purposes of this sec15 tion— 

16 ‘‘(1) ELECTION TO TAKE CREDIT.—No credit 

17 shall be allowed under subsection (a) for any ex18 penditures unless the taxpayer elects to have this 

19 section apply to such expenditures. 

20 ‘‘(2) YEAR OF ELECTION.—The taxpayer may 

21 elect the application of this section only for the first 

22 2 taxable years for which ordinary and necessary ex23 penses paid or incurred in carrying on such trade or 

24 business are allowable as a deduction by the tax25 payer under section 162. 


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1 ‘‘(3) CONTROLLED GROUPS AND COMMON CON2 TROL.—All persons treated as a single employer 

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

4 treated as 1 person. 

5 ‘‘(4) NO DOUBLE BENEFIT.—If a credit is de6 termined under this section with respect to any 

7 property, the basis of such property shall be reduced 

8 by the amount of the credit attributable to such 

9 property. 

10 ‘‘(5) VERIFICATION.—For purposes of deter11 mining whether an entity qualifies as an applicable 

12 veteran-owned small business for purposes of this 

13 section, the Secretary, in consultation with the Ad14 ministrator of the Small Business Administration, 

15 shall verify that the requirements described in sub16 section (b)(1) have been satisfied.’’. 

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

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

19 of the Internal Revenue Code of 1986 is amended by add20 ing at the end the following new item: 

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

21 (c) PART OF GENERAL BUSINESS CREDIT.—Section 

22 38(b) of the Internal Revenue Code of 1986, as amended 

23 by sections 13105, 13701, and 13704 of Public Law 117- 

24 169, is amended by striking ‘‘plus’’ at the end of para25 graph (40), by striking the period at the end of paragraph 


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1 (41) and inserting ‘‘, plus’’, and by adding at the end the 

2 following new paragraph: 

3 ‘‘(42) the veteran small business start-up credit 

4 determined under section 45BB.’’. 

5 (d) REPORT BY TREASURY INSPECTOR GENERAL

6 FOR TAX ADMINISTRATION.—Every fourth year after the 

7 date of the enactment of this Act, the Treasury Inspector 

8 General for Tax Administration shall include in one of the 

9 semiannual reports under section 5 of the Inspector Gen10 eral Act of 1978 with respect to such year, an evaluation 

11 of the credit allowed under section 45BB of the Internal 

12 Revenue Code of 1986 (as added by this section), includ13 ing an evaluation of the success of, and accountability with 

14 respect to, such credit. 

15 (e) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to taxable years beginning after 

17 the date of the enactment of this Act. 

Æ 


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