Hospitality and Commerce Job Recovery Act of 2020

To amend the Internal Revenue Code of 1986 to create a refundable tax credit for travel expenditures, and for other purposes. 1. Short title This Act may be cited as the Hospitality and Commerce Job Recovery Act of 2020 2. Establishment of tax credit to support the convention and trade show industry (a) In general For purposes of section 38 (1) 50 percent of the qualified participation costs paid or incurred by a taxpayer during such taxable year, and (2) in the case of an eligible provider, 100 percent of the qualified restart costs paid or incurred by such provider during such taxable year. (b) Qualified participation costs For purposes of this section, the term qualified participation costs (c) Eligible provider; qualified restart costs In this section— (1) Eligible provider The term eligible provider (A) provides facilities at which a qualified event may be held, or (B) sponsors or is otherwise responsible for the administration of a qualified event. (2) Qualified restart costs The term qualified restart costs COVID–19 (A) any renovation, remediation, or additional labor and rental costs related to preventing individuals present in such facility from contracting COVID–19, and (B) any testing of employees of the taxpayer or guests of such facility for symptoms of COVID–19. (d) Qualified event (1) In general In this section, the term qualified event (A) a convention, seminar, or similar meeting (as such terms are used in section 274 (B) a business meeting (as such term is used in such section), or (C) a trade show, which takes place after December 31, 2020. (2) Trade show For purposes of this subsection, the term trade show (e) Denial of double benefit No deduction shall be allowed under any provision of chapter 1 (f) Location requirement No credit shall be allowed under this section with respect to any qualified event unless such event is held within the United States (including any territory or possession of the United States). (g) Payroll credit for nonprofit employers (1) In general In the case of an organization which is described in section 501(c) (2) Limitations and refundability (A) Credit limited to employment taxes The credit allowed by paragraph (1) with respect to calendar quarters in any taxable year shall not exceed the applicable employment taxes (reduced by any credits allowed under subsections (e) and (f) of section 3111 (B) Refundability of excess credit (i) In general If the amount of the credit under paragraph (1) exceeds the limitation of subparagraph (A) for any calendar quarter, such excess shall be treated as an overpayment that shall be refunded under sections 6402(a) and 6413(b) of the Internal Revenue Code of 1986. (ii) Treatment of payments For purposes of section 1324 of title 31, United States Code, any amounts due to the employer under this paragraph shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section. (3) Applicable employment taxes For purposes of this subsection, the term applicable employment taxes (A) The taxes imposed under section 3111(a) (B) So much of the taxes imposed under section 3221(a) of such Code as are attributable to the rate in effect under section 3111(a) of such Code. (h) Regulations and guidance The Secretary of the Treasury (or the Secretary's delegate) may prescribe such regulations and other guidance as may be appropriate or necessary to carry out the purposes of this section. (i) Termination This section shall not apply to any costs paid or incurred in taxable years beginning after December 31, 2023. 3. Improvements to employee retention tax credit (a) Increase in credit percentage Section 2301(a) of the CARES Act ( Public Law 116–136 50 percent 80 percent (b) Increase in per employee limitation Section 2301(b)(1) of the CARES Act is amended by striking for all calendar quarters shall not exceed $10,000. shall not exceed— (A) $15,000 in any calendar quarter, and (B) $45,000 in the aggregate for all calendar quarters. . (c) Modification of threshold for treatment as a large employer (1) In general Section 2301(c)(3)(A) of the CARES Act is amended— (A) by striking for which the average number of full-time employees (within the meaning of section 4980H which is a large employer (B) by striking for which the average number of full-time employees (within the meaning of section 4980H which is not a large employer (2) Large employer defined Section 2301(c) of the CARES Act is amended by redesignating paragraph (6) as paragraph (7) and by inserting after paragraph (5) the following new paragraph: (6) Large employer The term large employer (A) the average number of full-time employees (as determined for purposes of section 4980H(c)(2) (B) the gross receipts (within the meaning of section 448(c) . (d) Phase-In of eligibility based on reduction in gross receipts (1) Reduction of decline in gross receipts necessary to qualify for credit Section 2301(c)(2)(B) of the CARES Act is amended— (A) by striking 50 percent 90 percent (B) by striking 80 percent 90 percent (2) Phase-in of credit if reduction in gross receipts is less than 50 percent Section 2301(c)(2) of the CARES Act is amended by adding at the end the following new subparagraph: (D) Phase-in of credit where business not suspended and reduction in gross receipts less than 50 percent (i) In general In the case of any calendar quarter with respect to which an eligible employer would not be an eligible employer if subparagraph (B)(i) were applied by substituting 50 percent 90 percent (I) the excess gross receipts percentage point amount, bears to (II) 40 percentage points. (ii) Excess gross receipts percentage point amount For purposes of this subparagraph, the term excess gross receipts percentage point amount (I) the lowest of the gross receipts percentage point amounts with respect to any calendar quarter occurring during the period described in clause (iii), over (II) 50 percentage points. (iii) Period described For purposes of applying clause (ii) to any calendar quarter, the period described in this clause is the period ending with such calendar quarter and beginning with the first calendar quarter during the period described in subparagraph (B). (iv) Gross receipts percentage point amounts For purposes of this subparagraph, the term gross receipts percentage point amount (I) the gross receipts (within the meaning of subparagraph (B)) for such calendar quarter, by (II) the gross receipts for the same calendar quarter in calendar year 2019. . (3) Gross receipts of tax-exempt organizations Section 2301(c)(2)(C) of the CARES Act is amended— (A) by striking of such Code, clauses (i) and (ii)(I) (i) clauses (i) and (ii)(I) , (B) by striking the period at the end and inserting , and (C) by adding at the end the following new clause: (ii) any reference in this section to gross receipts shall be treated as a reference to gross receipts within the meaning of section 6033 of such Code. . (e) Modification of treatment of health plan expenses (1) In general Section 2301(c)(5) of the CARES Act is amended to read as follows: (5) Wages (A) In general The term wages section 3121(a) (B) Allowance for certain health plan expenses (i) In general Such term shall include amounts paid or incurred by the eligible employer to provide and maintain a group health plan (as defined in section 5000(b)(1) (ii) Allocation rules For purposes of this section, amounts treated as wages under clause (i) shall be treated as paid with respect to any employee (and with respect to any period) to the extent that such amounts are properly allocable to such employee (and to such period) in such manner as the Secretary may prescribe. Except as otherwise provided by the Secretary, such allocation shall be treated as properly made if made on the basis of being pro rata among periods of coverage. . (2) Conforming amendment Section 2301(c)(3) of the CARES Act is amended by striking subparagraph (C). (f) Qualified wages permitted To include amounts for tip replacement (1) In general Section 2301(c)(3)(B) of the CARES Act is amended by inserting (including tips which would have been deemed to be paid by the employer under section 3121(q)) would have been paid (2) Conforming amendment Section 2301(h)(2) of the CARES Act is amended by inserting 45B or 45S (g) Certain governmental employers eligible for credit (1) In general Section 2301(f) of the CARES Act is amended to read as follows: (f) Certain governmental employers (1) In general The credit under this section shall not be allowed to the Federal Government or any agency or instrumentality thereof. (2) Exception Paragraph (1) shall not apply to any organization which is described in section 501(c)(1) (3) Special rules In the case of any State government, Indian tribal government, or any agency, instrumentality, or political subdivision of the foregoing— (A) clauses (i) and (ii)(I) of subsection (c)(2)(A) shall apply to all operations of such entity, and (B) subclause (II) of subsection (c)(2)(A)(ii) shall not apply. . (2) Coordination with application of certain definitions (A) In general Section 2301(c)(5)(A) of the CARES Act, as amended by the preceding provisions of this Act, is amended by adding at the end the following: For purposes of the preceding sentence (other than for purposes of subsection (b)(2)), wages as defined in section 3121(a) (B) Conforming amendments Sections 2301(c)(6) of the CARES Act is amended by striking Any term Except as otherwise provided in this section, any term (h) Application of credit to employers of domestic workers (1) In general Section 2301(c)(2) of the CARES Act, as amended by the preceding provisions of this Act, is amended by adding at the end the following new subparagraph: (E) Employers of domestic workers In the case of an employer with one or more employees who perform domestic service (within the meaning of section 3121(a)(7) of such Code) in the private home of such employer, with respect to such employees— (i) subparagraph (A) shall be applied— (I) by substituting employing an employee who performs domestic service in the private home of such employer carrying on a trade or business (II) by substituting such employment the operation of the trade or business described in clause (i) (III) without regard to clause (ii)(II), and (ii) such employer shall be treated as a large employer. . (2) Denial of double benefit Section 2301(h)(2) of the CARES Act, as amended by preceding provisions of this Act, is amended— (A) by striking shall not be taken into account for purposes of (A) for purposes of , (B) by striking the period at the end and inserting , and (C) by adding at the end the following: (B) if such wages are paid for domestic service described in subsection (c)(2)(E), as employment-related expenses for purposes of section 21 of such Code. In the case of any individual who pays wages for domestic service described in subsection (c)(2)(E) and receives a reimbursement for such wages which is excludible from gross income under section 129 of such Code, such wages shall not be treated as qualified wages for purposes of this section. . (i) Effective date The amendments made by this section shall take effect as if included in section 2301 of the CARES Act. 4. Repeal of limitation on entertainment, etc. expenses related to trade or business (a) In general Section 274 (1) by redesignating subsection (o) as subsection (p), (2) by redesignating subsection (l), as added by section 13304(c) of Public Law 115–97 (3) by moving such subsection (o), as so redesignated, to the location after subsection (n). (b) Repeal The amendments made by subsections (a) and (b) of section 13304 of Public Law 115–97 (c) Conforming amendment Subsection (d) of section 13304 of Public Law 115–97 subsection (o) as subsection (p) subsections (o) and (p) as subsections (p) and (q), respectively (d) Effective date (1) In general The amendments made by subsections (a) and (c) and the repeal made by subsection (b) shall take effect on the date of the enactment of this Act. (2) Application The provisions of law as restored by subsection (b) shall apply to amounts paid or incurred in taxable years ending after the date of the enactment of this Act. 5. Establishment of tax credit to support the restaurant industry (a) In general For purposes of section 38 (b) Eligible taxpayer For purposes of this section, the term eligible taxpayer (1) which owns a trade or business devoted to preparation and on-premises consumption of food and beverages, or (2) which owns property on which such a trade or business operates, if more than 50 percent of the square footage of such property is devoted to preparation of, and seating for on-premises consumption of, prepared meals. (c) Qualified restart costs For purposes of this section, the term qualified restart costs COVID–19 (1) any renovation, remediation, or additional labor and rental costs related to preventing individuals present at such trade or business or on such property from contracting COVID–19; and (2) any testing of employees of the eligible taxpayer or guests of such trade or business or such property for symptoms of COVID–19. For purposes of the preceding sentence, a trade or business shall be treated as having reduced services if such trade or business reduced hours of operation, number of employees or employee hours, or capacity of seating areas, closed seating areas, or took any other measures which reduced services provided or operations of the trade or business as determined by the Secretary of the Treasury. (d) Denial of double benefit No deduction shall be allowed under any provision of chapter 1 (e) Regulations and guidance The Secretary of the Treasury (or the Secretary's delegate) may prescribe such regulations and other guidance as may be appropriate or necessary to carry out the purposes of this section. (f) Termination This section shall not apply to any costs paid or incurred in taxable years beginning after December 31, 2022. 6. Credit for travel expenditures (a) In general Subpart C of part IV of subchapter A of chapter 1 36A. Credit for travel expenditures (a) Allowance of credit In the case of an individual who pays or incurs any qualified travel expenses during a taxable year, there shall be allowed as a credit against the tax imposed by this subtitle for such taxable year an amount equal to 50 percent of such expenses. (b) Limitations (1) Dollar limitation The credit allowed under subsection (a) for any taxable year shall not exceed the sum of— (A) $1,500 ($750 in the case of a married individual filing a separate return), plus (B) $500 for each qualifying child (as defined in section 152(c)) of the individual, but not to exceed $1,500. (2) Limitation based on adjusted gross income (A) In general The amount allowable as a credit under subsection (a) (after the application of paragraph (1) and determined without regard to this paragraph) for the taxable year shall be reduced (but not below zero) by $2 for every $50 by which the taxpayer’s modified adjusted gross income for such taxable year exceeds $75,000 ($150,000 in the case of a joint return). (B) Modified adjusted gross income The term modified adjusted gross income (c) Qualified travel expense For purposes of this section— (1) In general The term qualified travel expense (2) Minimum amount Any expense (determined by treating all items on a single receipt as 1 expense) which is less than $25 shall not be taken into account under paragraph (1). (3) United States The term United States (4) Exception For purposes of paragraph (1), amounts paid with respect to a residence or other lodging owned by the individual shall not be treated as qualified travel expenses. (d) Election To carry credit to preceding year At the election of the taxpayer, any credit allowable under this section for a taxable year may be carried back (in its entirety) to the preceding taxable year and treated as a credit allowed under this subpart for such year. (e) Restrictions No credit shall be allowed to an individual under subsection (a) with respect to a qualified travel expense if— (1) the individual receives a refund or reimbursement from any person for the expense, (2) a deduction is allowed under section 162 with respect to the expense, (3) a deduction under section 151 with respect to individual is allowable to another taxpayer for such taxable year, or (4) the individual does not attach sufficient evidence of the expense, as prescribed by the Secretary, to the return of tax for such taxable year. (f) Termination This section shall not apply to any qualified travel expenses paid or incurred after December 31, 2023. . (b) Clerical amendment The table of sections for subpart C of part IV of subchapter A of chapter 1 (c) Conforming amendment Section 6211(b)(4)(A) , 36A 36 (d) Effective date The amendments made by this section shall apply to amounts paid or incurred after December 31, 2020.

Summary: Hospitality and Commerce Job Recovery Act of 2020 This bill establishes new tax credits and revises existing credits and deductions to protect the hospitality and restaurant industries. Specifically, the bill allows a convention and trade show restart tax credit for (1) the costs of participation in a convention, seminar, or similar meeting, a business meeting, or a trade show that takes place after 2020; and (2) the costs of reopening an entertainment facility closed due to the COVID-19 (i.e., coronavirus disease 2019) pandemic. It also allows a business-related tax credit for the costs of reopening restaurants or food service businesses forced to close down or reduce operations due to COVID-19. The bill modifies, and increases the rate of, the tax credit for the retention of employees for an employer whose business has been affected by a disaster or public health emergency. It also repeals the increased limitations on the tax deduction for meals and entertainment expenses enacted in 2017. Finally, the bill allows individual taxpayers a new tax credit for travel expenses relating to entertainment activities occurring in the United States between January 1, 2021, and December 31, 2023.