II 

112TH CONGRESS 

1ST SESSION S. 1540 

To amend the Internal Revenue Code of 1986 to allow credits for the purchase 

of franchises by veterans. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 12, 2011 

Mr. CASEY 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 allow credits 

for the purchase of franchises by 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 ‘‘Help Veterans Own 

5 Franchises Act’’. 

6 SEC. 2. VETERANS FRANCHISE FEE CREDIT. 

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

9 1986 is amended by adding at the end the following new 

10 section: 


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1 ‘‘SEC. 45S. VETERANS FRANCHISE FEE CREDIT. 

2 ‘‘(a) VETERANS FRANCHISE FEE CREDIT.— 

3 ‘‘(1) IN GENERAL.—For purposes of section 38, 

4 the veterans franchise fee credit determined under 

5 this section for the taxable year is an amount equal 

6 to 25 percent of the qualified franchise fees paid or 

7 incurred by a veteran during the taxable year. 

8 ‘‘(2) LIMITATION.—The amount allowed as a 

9 credit under paragraph (1) with respect to the pur10 chase of any franchise shall not exceed $100,000. 

11 ‘‘(b) REDUCTION WHERE FRANCHISE NOT 100 PER12 CENT VETERAN-OWNED.—In the case of any franchise in 

13 which veterans do not own 100 percent of the stock or 

14 of the capital or profits interests of the franchise, the cred15 it under subsection (a) shall be the credit amount deter16 mined under such subsection, multiplied by the same ratio 

17 as— 

18 ‘‘(1) the stock or capital or profits interests of 

19 the franchise held by veterans, bears 

20 ‘‘(2) to the total stock or capital or profits in21 terests of the franchise. 

22 For purposes of this subsection, the spouse of a veteran 

23 shall be treated as a veteran. 

24 ‘‘(c) QUALIFIED FRANCHISE FEE.—For purposes of 

25 this section, the term ‘qualified franchise fee’ means any 


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1 one-time fee required by the franchisor when entering into 

2 a franchise agreement with a veteran as the franchisee. 

3 ‘‘(d) OTHER DEFINITIONS.—For purposes of this 

4 section, the terms ‘franchise’, ‘franchisee’, ‘franchisor’, 

5 and ‘franchise fee’ have the meanings given such terms 

6 in part 436 of title 16, Code of Federal Regulations (as 

7 in effect on January 1, 2009). 

8 ‘‘(e) VETERAN.—The term ‘veteran’ has the meaning 

9 given such term by section 101 of title 38, United States 

10 Code. 

11 ‘‘(f) ELECTION.—This section shall not apply to a 

12 taxpayer for any taxable year if such taxpayer elects to 

13 have this section not apply for such taxable year.’’. 

14 (b) CREDIT TO BE PART OF GENERAL BUSINESS

15 CREDIT.—Section 38(b) of the Internal Revenue Code of 

16 1986 is amended by striking ‘‘plus’’ at the end of para17 graph (35), by striking the period at the end of paragraph 

18 (36) and inserting ‘‘, plus’’, and by adding at the end the 

19 following new paragraph: 

20 ‘‘(37) the veterans franchise fee credit deter21 mined under section 45S(a).’’. 

22 (c) CLERICAL AMENDMENT.—The table of sections 

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

24 of the Internal Revenue Code of 1986 is amended by add25 ing at the end the following new item: 

‘‘Sec. 45S. Veterans franchise fee credit.’’. 


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

2 this section shall apply to taxable years ending after De3 cember 31, 2010. 

4 SEC. 3. PUBLICATION OF INFORMATION BY DEPARTMENT 

5 OF VETERANS AFFAIRS AND SMALL BUSI6 NESS ADMINISTRATION. 

7 The Administrator of the Small Business Administra8 tion and the Secretary of Veterans Affairs shall publicize 

9 in mailings and brochures sent to veterans service organi10 zations and veteran advocacy groups information regard11 ing discounted franchise fees under section 45S of the In12 ternal Revenue Code of 1986 and other information about 

13 the program established under amendments made by this 

14 Act. 

Æ 


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