Brick and Mortar Small Business Tax Credit Act of 2022

To amend the Internal Revenue Code of 1986 to establish a State and local general sales tax credit for small businesses. 1. Short title This Act may be cited as the Brick and Mortar Small Business Tax Credit Act of 2022 2. State and local general sales tax credit for small businesses (a) In general Subpart D of part IV of subchapter A of chapter 1 45U. State and local general sales tax credit for small businesses (a) Allowance of credit For purposes of section 38, in the case of an eligible small business, the State and local general sales tax credit determined under this section for the taxable year is an amount equal to 5 percent of so much of the business gross receipts of the taxpayer for the taxable year as do not exceed $1,000,000 (regardless of whether such receipts are subject to a State or local general sales tax). (b) Phaseout of credit If the business gross receipts of the taxpayer for the taxable year exceed $1,000,000, the credit otherwise determined under subsection (a) shall be reduced by an amount which bears the same ratio to the amount of such credit (determined without regard to this subsection) as— (1) such excess, bears to (2) $1,000,000. (c) Definitions and special rules (1) Definitions For purposes of this section— (A) Eligible small business (i) In general The term eligible small business (I) the business gross receipts of such taxpayer for such taxable year do not exceed $2,000,000, and (II) more than 50 percent of such business gross receipts of such taxpayer for such taxable year were generated by in-person sales. (ii) Special rule for 2020 and 2021 In the case of any taxable year beginning in or with calendar year 2020 or 2021, clause (i)(II) shall be applied by substituting any percentage of more than 50 percent (B) Business gross receipts The term business gross receipts (C) In-person sales The term in-person sales (D) State The term State (2) Aggregation rules All persons treated as a single employer under subsection (a) or (b) of section 52, or subsection (n) or (o) of section 414, shall be treated as one person. (d) Termination Subsection (a) shall not apply with respect to any taxable year beginning after December 31, 2026. . (b) Credit made part of general business credit Subsection (b) of section 38 of such Code is amended by striking plus , plus (34) in the case of an eligible small business (as defined in section 45U), the State and local general sales tax credit determined under section 45U. . (c) Clerical amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item: Sec. 45U. State and local general sales tax credit for small businesses. . (d) Public awareness campaign (1) Requirement The Administrator of the Small Business Administration, in consultation with the Internal Revenue Service, shall conduct a public awareness campaign to inform relevant small business concerns of the tax credit under section 45U (2) Plan Not later than 180 days after the date of the enactment of this Act, the Administrator shall submit to Congress a plan to implement the public awareness campaign under paragraph (1), including— (A) a description of the objectives and goals for the campaign; and (B) a description of how the Administrator will work with other departments and agencies of the Federal Government and with nongovernmental entities to inform relevant small business concerns of the tax credit described in paragraph (1). (3) Authorization of appropriations There is authorized to be appropriated to the Administrator $500,000 for fiscal year 2022 to carry out the public awareness campaign under paragraph (1). (e) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2019.

Summary: Brick and Mortar Small Business Tax Credit Act of 2022 This bill allows a new state and local general sales tax credit through 2026 for certain small businesses whose business gross receipts for the taxable year do not exceed $2 million and that were generated by a specified percentage of in-person sales. The amount of the credit is 5% of business gross receipts not exceeding $1 million. The bill also requires the Small Business Administration to conduct a public awareness campaign to inform small businesses of this tax credit.