Veteran Entrepreneurs Act of 2023

To amend the Internal Revenue Code of 1986 to allow tax credits to veterans for the establishment of franchises. 1. Short title This Act may be cited as the Veteran Entrepreneurs Act of 2023 2. Veterans franchising credit (a) In general Subpart D of part IV of subchapter A of chapter 1 45BB. Veterans franchising credit (a) Veterans franchise fee credit (1) In general For purposes of section 38 and subject to the limitation set forth in paragraph (2), in the case of an eligible veteran or business owned by an eligible veteran, the veterans franchise fee credit determined under this section for the taxable year is an amount equal to 25 percent of the qualified franchise fee paid or incurred by an eligible veteran in connection with the purchase of a franchise. (2) Limitation The amount of qualified franchise fee taken into account under paragraph (1) shall not exceed $400,000. (b) Reduction where franchise not 100-Percent veteran owned In the case of any franchise in which veterans do not own 100 percent of the stock or the capital or profits interests of the franchisee, the veterans franchise fee credit under subsection (a) shall be the amount which bears the same ration to the amount determined under subsection (a) (without regard to this subsection) as— (1) the stock or capital or profits interests of the franchise held by veterans, bears to (2) the total stock or capital or profits interests of the franchisee. For purposes of this subsection, the spouse of a veteran shall be treated as a veteran. (c) Qualified franchise fee For purposes of this section, the term qualified franchise fee (d) Other definitions For purposes of this section, the terms franchise franchisee franchisor franchise fee (e) Eligible veteran For purposes of this section, the term eligible veteran qualified franchise fee (f) Transfer of credit With respect to the credit under subsection (a) for any taxable year, an eligible veteran may elect to transfer the credit to an eligible franchisor in exchange for a discount in the franchise fee commensurate with the value of the credit. In such case, the franchisor specified in such election shall be treated as the taxpayer for purposes of this title with respect to such credit (or such portion thereof). For purposes of this subsection, the term ‘eligible franchisor’ means the person who grants a franchise to the eligible veteran and participates in the franchise agreement. (g) Election This section shall not apply to a taxpayer for any taxable year if such taxpayer elects to have this section not apply for such taxable year. . (b) Credit To be part of general business credit Section 38(b) of such Code is amended by striking plus , plus (42) the veterans franchise fee credit determined under section 45BB(a). . (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. 45BB. Veterans franchising credit. . (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2023. 3. Publication of information by Department of Veterans Affairs and Small Business Administration The Administrator of the Small Business Administration and the Secretary of Veterans Affairs shall publicize in mailings and brochures sent to veterans service organizations and veteran advocacy groups information regarding discounted franchise fees under section 45BB

Summary: Veteran Entrepreneurs Act of 2023 This bill allows a business-related tax credit of 25% of up to $400,000 of the franchise fees paid or incurred by an eligible veteran for the purchase of a franchise. The bill reduces the amount of such credit if the veteran does not own 100% of the stock or capital or profits interest of the franchisee. An eligible veteran is a person who served in the active military, naval, or air service; was discharged or released under conditions other than dishonorable; and who pays or incurs a franchise fee in connection with a franchise agreement with a franchisor. The veteran may elect to transfer the credit to an eligible franchisor in exchange for a discount in the franchise fee commensurate with the value of the credit. The Small Business Administration and the Department of Veterans Affairs must provide information about the tax credit allowed by this bill to veterans service organizations and veteran advocacy groups.