II 

115TH CONGRESS 

2D SESSION S. 2950 

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

establishment of franchises by veterans. 

IN THE SENATE OF THE UNITED STATES 

MAY 24, 2018 

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 establishment 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 ‘‘Veteran Entrepreneurs 

5 Act of 2018’’. 

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. 45T. 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 franchisee. 

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 initial 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 ‘initial fee’ have the meanings given such terms in 

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

7 effect on January 1, 2018). 

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) TRANSFER OF CREDIT.— 

12 ‘‘(1) IN GENERAL.—With respect to the credit 

13 allowed under subsection (a) for any taxable year, in 

14 the case of a veteran who— 

15 ‘‘(A) has received a reduction in the 

16 amount of the qualified franchise fee otherwise 

17 required by the franchisor, and 

18 ‘‘(B) elects application of this subsection 

19 for such taxable year with respect to any por20 tion of such credit which is commensurate with 

21 the amount of the reduction described in sub22 paragraph (A), 

23 the franchisor, and not the veteran, shall be treated 

24 as the taxpayer for purposes of this title with re25 spect to such portion of the credit. 


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1 ‘‘(2) PROHIBITION.—A franchisor may not re2 quire a veteran to elect application of this subsection 

3 as a condition for entering into a 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 the Internal Revenue Code of 

10 1986 is amended by striking ‘‘plus’’ at the end of para11 graph (36), by striking the period at the end of paragraph 

12 (37) and inserting ‘‘, plus’’, and by adding at the end the 

13 following new paragraph: 

14 ‘‘(38) the veterans franchise fee credit deter15 mined under section 45T(a).’’. 

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

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

18 of the Internal Revenue Code of 1986 is amended by add19 ing at the end the following new item: 

‘‘Sec. 45T. Veterans franchise fee credit.’’. 

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

21 this section shall apply to taxable years ending after De22 cember 31, 2018. 


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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 45T 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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