I 

116TH CONGRESS 

1ST SESSION H. R. 186 

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 HOUSE OF REPRESENTATIVES 

JANUARY 3, 2019 

Mr. LAWSON of Florida 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 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. 45T. 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 owned and controlled by one or more veterans or 

16 spouses of veterans and the principal place of busi17 ness of which is in an underserved community. 

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

19 ‘owned and controlled’ means— 

20 ‘‘(A) management and operation of the 

21 daily business, and— 

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

23 sole ownership, 


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1 ‘‘(ii) in the case of a corporation, owner2 ship (by vote or value) of not less than 51 per3 cent of the stock in such corporation, or 

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

5 venture, ownership of not less than 51 percent 

6 of the profits interests or capital interests in 

7 such partnership or joint venture. 

8 ‘‘(3) SMALL BUSINESS.—The term ‘small busi9 ness’ means, with respect to any taxable year, any 

10 person engaged in a trade or business in the United 

11 States if— 

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

13 the preceding taxable year did not exceed 

14 $5,000,000, or 

15 ‘‘(B) in the case of a person to which sub16 paragraph (A) does not apply, such person em17 ployed not more than 100 full-time employees 

18 during the preceding taxable year. 

19 For purposes of subparagraph (B), an employee 

20 shall be considered full-time if such employee is em21 ployed at least 30 hours per week for 20 or more 

22 calendar weeks in the taxable year. 

23 ‘‘(4) UNDERSERVED COMMUNITY.—The term 

24 ‘underserved community’ means any area located 

25 within— 


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

2 3(p) of the Small Business Act (15 U.S.C. 

3 632(p))), 

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

5 community, designated under section 1391 (and 

6 without regard to whether or not such designa7 tion remains in effect), 

8 ‘‘(C) an area of low income or moderate in9 come (as recognized by the Federal Financial 

10 Institutions Examination Council), or 

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

12 classified by the Economic Research Service of 

13 the Department of Agriculture). 

14 ‘‘(5) VETERAN OR SPOUSE OF VETERAN.—The 

15 term ‘veteran or spouse of a veteran’ has the mean16 ing given such term by section 7(a)(31)(G)(iii) of 

17 the Small Business Act (15 U.S.C. 

18 636(a)(31)(G)(iii)). 

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

20 purposes of this section— 

21 ‘‘(1) IN GENERAL.—The term ‘qualified start22 up expenditures’ means— 

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

24 in section 195(c)), or 


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

2 the taxable year for the purchase or lease of 

3 real property, or the purchase of personal prop4 erty, placed in service during the taxable year 

5 and used in the active conduct of a trade or 

6 business. 

7 ‘‘(d) SPECIAL RULES.—For purposes of this sec8 tion— 

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

10 elect the application of this section only for the first 

11 2 taxable years for which ordinary and necessary ex12 penses paid or incurred in carrying on such trade or 

13 business are allowable as a deduction by the tax14 payer under section 162. 

15 ‘‘(2) CONTROLLED GROUPS AND COMMON CON16 TROL.—All persons treated as a single employer 

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

18 treated as 1 person. 

19 ‘‘(3) NO DOUBLE BENEFIT.—If a credit is de20 termined under this section with respect to any 

21 property, the basis of such property shall be reduced 

22 by the amount of the credit attributable to such 

23 property.’’. 

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

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


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1 of such Code is amended by adding at the end the fol2 lowing new item: 

‘‘Sec. 45T. Veteran small business start-up credit.’’. 

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

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

5 at the end of paragraph (31), by striking the period at 

6 the end of paragraph (32) and inserting ‘‘, plus’’, and by 

7 adding at the end the following new paragraph: 

8 ‘‘(33) the veteran small business start-up credit 

9 determined under section 45T.’’. 

10 (d) REPORT BY TREASURY INSPECTOR GENERAL

11 FOR TAX ADMINISTRATION.—Every fourth year after the 

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

13 General for Tax Administration shall include in one of the 

14 semiannual reports under section 5 of the Inspector Gen15 eral Act of 1978 with respect to such year, an evaluation 

16 of the program under section 45T of the Internal Revenue 

17 Code of 1986 (as added by this section), including an eval18 uation of the success of, and accountability with respect 

19 to, such program. 

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

21 this section shall apply to taxable years beginning after 

22 the date of the enactment of this Act. 

Æ 


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