ABC Act of 2023

To amend the Internal Revenue Code of 1986 to provide an exclusion from gross income for interest on certain small business loans. 1. Short title This Act may be cited as the Access Business Credit Act of 2023 ABC Act of 2023 2. Exclusion of interest on certain small business loans (a) In general Part III of subchapter B of chapter 1 139J. Interest on certain small business loans (a) In general In the case of a bank described in subsection (c), gross income shall not include qualified interest received from a small business during the taxable year. (b) Qualified interest The term qualified interest (1) secured by land situated in the United States that is used or held by the small business in connection with the active conduct of a farming business, or (2) incurred in the ordinary course of the trade or business of the small business. (c) Bank described (1) In general A bank is described in this subsection if the bank has less than $50,000,000,000 in assets at the close of the preceding taxable year. (2) Bank defined For purposes of this subsection— (A) In general The term bank (i) any financial institution described in section 581 or 591, and (ii) a corporation which, under the laws of the State of its incorporation, is subject to supervision and examination by the Commissioner of Banking or other officer of such State in charge of the administration of the banking laws of such State. (B) Holding company The term bank (i) any bank holding company (within the meaning of section 2(a) of the Bank Holding Company Act of 1956), and (ii) any subsidiary of a financial institution described in section 581 or 591 or of any bank holding company if such subsidiary is predominantly engaged (directly or indirectly) in the active conduct of a banking, financing, or similar business. (d) Small business The term small business 15 U.S.C. 632 (e) Farming business The term farming business (f) Termination This section shall not apply to interest received after December 31, 2027. . (b) Clerical amendment The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 139I the following new item: Sec. 139J. Interest on certain small business loans. . (c) Report to Congress Not later than December 31, 2025, the Commissioner of Internal Revenue, after consultation with the Federal reserve banks, shall submit to Congress a written report providing the recommendation of the Commissioner regarding whether the exclusion provided under section 139J (d) Effective date The amendments made by this section shall apply to interest received after December 31, 2022, in taxable years ending after such date.

Summary: Access Business Credit Act of 2023 or the ABC Act of 2023 This bill excludes from the gross income of certain banks, for income tax purposes, interest received on small business loans of up to $5 million. The exclusion does not apply to interest received after 2027. The bill applies to loans that are (1) secured by land situated in the United States that is used or held by the small business in connection with the active conduct of a farming business, or (2) incurred in the ordinary course of the trade or business of the small business. To be eligible for the exclusion, a bank must have less than $50 billion in assets at the close of the preceding taxable year.