I 

115TH CONGRESS 

1ST SESSION H. R. 4473 

To amend the Internal Revenue Code of 1986 to allow tax credits to veterans 

for the establishment of franchises. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 28, 2017 

Ms. TENNEY (for herself and Ms. BROWNLEY 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 allow tax 

credits to veterans for the establishment of franchises. 

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 Entrepreneurs 

5 Act of 2017’’. 

6 SEC. 2. VETERANS FRANCHISING 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 (relating to business related credits) is amended by 

10 adding at the end the following new section: 


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1 ‘‘SEC. 45S. VETERANS FRANCHISING CREDIT. 

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

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

4 and subject to the limitation set forth in paragraph 

5 (2), in the case of an eligible veteran or business 

6 owned by an eligible veteran, the veterans franchise 

7 fee credit determined under this section for the tax8 able year is an amount equal to 25 percent of the 

9 qualified franchise fee paid or incurred by an eligible 

10 veteran in connection with the purchase of a fran11 chise. 

12 ‘‘(2) LIMITATION.—The amount of qualified 

13 franchise fee taken into account under paragraph 

14 (1) shall not exceed $400,000. 

15 ‘‘(b) REDUCTION WHERE FRANCHISE NOT 100-PER16 CENT VETERAN OWNED.—In the case of any franchise in 

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

18 the capital or profits interests of the franchisee, the vet19 erans franchise fee credit under subsection (a) shall be the 

20 amount which bears the same ration to the amount deter21 mined under subsection (a) (without regard to this sub22 section) as— 

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

24 the franchise held by veterans, bears to 

25 ‘‘(2) the total stock or capital or profits inter26 ests of the franchisee. 


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

2 shall be treated as a veteran. 

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

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

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

6 a franchise agreement with a veteran as the franchisee. 

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

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

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

10 in part 436 of title 16, Code of Federal Regulations. 

11 ‘‘(e) ELIGIBLE VETERAN.—For purposes of this sec12 tion, the term ‘eligible veteran’ means a person who served 

13 in the active military, naval, or air service, and who was 

14 discharged or released therefrom under conditions other 

15 than dishonorable who pays or incurs a ‘qualified franchise 

16 fee’ in connection with a franchise agreement with a 

17 franchisor. 

18 ‘‘(f) TRANSFER OF CREDIT.—With respect to the 

19 credit under subsection (a) for any taxable year, an eligi20 ble veteran may elect to transfer the credit to an eligible 

21 franchisor in exchange for a discount in the franchise fee 

22 commensurate with the value of the credit. In such case, 

23 the franchisor specified in such election shall be treated 

24 as the taxpayer for purposes of this title with respect to 

25 such credit (or such portion thereof). 


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1 For purposes of this subsection, the term ‘eligible 

2 franchisor’ means the person who grants a franchise to 

3 the eligible veteran and participates in the franchise agree4 ment. 

5 ‘‘(g) ELECTION.—This section shall not apply to a 

6 taxpayer for any taxable year if such taxpayer elects to 

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

8 (b) CREDIT TO BE PART OF GENERAL BUSINESS

9 CREDIT.—Section 38(b) of such Code is amended by strik10 ing ‘‘plus’’ at the end of paragraph (35), by striking the 

11 period at the end of paragraph (36) and inserting ‘‘, plus’’, 

12 and by adding at the end the following new paragraph: 

13 ‘‘(37) the veterans franchise fee credit deter14 mined under section 45S(a).’’. 

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

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

17 of such Code is amended by adding at the end the fol18 lowing new item: 

‘‘Sec. 45S. Veterans franchising credit.’’. 

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

20 this section shall apply to taxable years beginning after 

21 December 31, 2017. 


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1 SEC. 3. PUBLICATION OF INFORMATION BY DEPARTMENT 

2 OF VETERANS AFFAIRS AND SMALL BUSI3 NESS ADMINISTRATION. 

4 The Administrator of the Small Business Administra5 tion and the Secretary of Veterans Affairs shall publicize 

6 in mailings and brochures sent to veterans service organi7 zations and veteran advocacy groups information regard8 ing discounted franchise fees under section 45S of the In9 ternal Revenue Code of 1986 and other information about 

10 the program established under amendments made by this 

11 Act. 

Æ 


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