I 

111TH CONGRESS 

1ST SESSION H. R. 2672 

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

establishment of franchises with veterans. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 3, 2009 

Mr. SCHOCK (for himself and Mr. BOSWELL) 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 credits 

for the establishment of franchises with 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 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. 45R. VETERANS FRANCHISING. 

2 ‘‘(a) FRANCHISOR VETERANS DISCOUNT CREDIT.— 

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

4 the franchisor veterans discount credit determined 

5 under this section for the taxable year is an amount 

6 equal to 50 percent of the qualified franchise fee dis7 count provided by the taxpayer during the taxable 

8 year. 

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

10 credit under paragraph (1) with respect to the pur11 chase of any franchise shall not exceed $25,000. 

12 ‘‘(b) VETERANS FRANCHISE FEE CREDIT.— 

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

14 the veterans franchise fee credit determined under 

15 this section for the taxable year is an amount equal 

16 to 25 percent of the qualified franchise fee paid or 

17 incurred by the taxpayer in connection with the pur18 chase of a franchise in which a qualified franchise 

19 fee discount is offered by the franchisor. 

20 ‘‘(2) LIMITATION.—For purposes of paragraph 

21 (1), the amount of franchise fees taken into account 

22 under paragraph (1) in connection with a franchise 

23 shall not exceed $100,000. 

24 ‘‘(c) REDUCTION WHERE FRANCHISE NOT 100 PER25 CENT VETERAN-OWNED.—In the case of any franchise in 

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


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1 of the capital or profits interests of the franchisee, the 

2 credits under subsections (a) and (b) shall be the credit 

3 amount determined under each such subsection, multiplied 

4 by the same ratio as— 

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

6 the franchise held by veterans, bears 

7 ‘‘(2) to the total stock or capital or profits in8 terests of the franchisee. 

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

10 shall be treated as a veteran. 

11 ‘‘(d) QUALIFIED FRANCHISE FEE DISCOUNT.—For 

12 purposes of this section, the term ‘qualified franchise fee 

13 discount’ means with respect to a franchise arrange14 ment— 

15 ‘‘(1) the amount of the franchise fee offer listed 

16 in the most recent franchise disclosure document of 

17 the franchisor, over 

18 ‘‘(2) the qualified franchise fee actually paid. 

19 ‘‘(e) QUALIFIED FRANCHISE FEE.—For purposes of 

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

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

22 a franchise with a qualified veteran. 

23 ‘‘(f) OTHER DEFINITIONS.—For purposes of this sec24 tion, the terms ‘franchise’, ‘franchisee’, ‘franchisor’, ‘fran25 chise fee’, and ‘franchise disclosure document’ have the 


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1 meanings given such terms in part 436 of title 16, Code 

2 of Federal Regulations (as in effect on January 1, 2009). 

3 ‘‘(g) VETERAN.—The term ‘veteran’ has the meaning 

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

5 Code. 

6 ‘‘(h) ELECTION.—This section shall not apply to a 

7 taxpayer for any taxable year if such taxpayer elects to 

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

9 (b) CREDIT TO BE PART OF GENERAL BUSINESS

10 CREDIT.—Section 38(b) of such Code is amended by strik11 ing ‘‘plus’’ at the end of paragraph (34), by striking the 

12 period at the end of paragraph (35) and inserting a 

13 comma, and by adding at the end the following new para14 graphs: 

15 ‘‘(36) the franchisor veterans discount credit 

16 determined under section 45R(a), plus 

17 ‘‘(37) the veterans franchise fee credit deter18 mined under section 45R(b).’’. 

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

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

21 of such Code is amended by adding at the end the fol22 lowing new item: 

‘‘Sec. 45R. Veterans franchising.’’. 

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

24 this section shall apply to taxable years ending after De25 cember 31, 2008. 


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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 45R 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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