I 
117TH CONGRESS 
2D SESSION 
H. R. 6428 
To amend the Internal Revenue Code of 1986 to establish a State and 
local general sales tax credit for small businesses. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 19, 2022 
Mr. KHANNA introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to establish 
a State and local general sales tax credit for small busi-
nesses. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Brick and Mortar 
Small Business Tax Credit Act of 2022’’. 
SEC. 2. STATE AND LOCAL GENERAL SALES TAX CREDIT 
FOR SMALL BUSINESSES. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
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1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 45U. STATE AND LOCAL GENERAL SALES TAX CREDIT 
FOR SMALL BUSINESSES. 
‘‘(a) ALLOWANCE OF CREDIT.—For purposes of sec-
tion 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 per-
cent of so much of the business gross receipts of the tax-
payer 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 sub-
section (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 sec-
tion— 
‘‘(A) ELIGIBLE SMALL BUSINESS.— 
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‘‘(i) IN GENERAL.—The term ‘eligible 
small business’ means any taxpayer for 
any taxable year if— 
‘‘(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 be-
ginning in or with calendar year 2020 or 
2021, clause (i)(II) shall be applied by 
substituting ‘any percentage of’ for ‘more 
than 50 percent’. 
‘‘(B) BUSINESS
GROSS
RECEIPTS.—The 
term ‘business gross receipts’ means gross re-
ceipts received in the course of any trade or 
business (other than the trade or business of 
being an employee). 
‘‘(C) IN-PERSON
SALES.—The term ‘in- 
person sales’ means a sales transaction in which 
a customer pays for a good or service at a phys-
ical location of an eligible small business. 
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‘‘(D) STATE.—The term ‘State’ means 
each of the several States, the District of Co-
lumbia, American Samoa, Guam, the Common-
wealth of the Northern Mariana Islands, Puerto 
Rico, the Virgin Islands of the United States, 
and any other territory of the United States. 
‘‘(2) AGGREGATION RULES.—All persons treat-
ed 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’’ at the end of paragraph (32), 
by striking the period at the end of paragraph (33) and 
inserting ‘‘, plus’’, and by adding at the end the following 
new paragraph: 
‘‘(34) in the case of an eligible small business 
(as defined in section 45U), the State and local gen-
eral 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 
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of such Code is amended by adding at the end the fol-
lowing 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 busi-
ness concerns of the tax credit under section 45U of 
the Internal Revenue Code of 1986, as added by 
subsection (a). 
(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), in-
cluding— 
(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 nongovern-
mental entities to inform relevant small busi-
ness concerns of the tax credit described in 
paragraph (1). 
(3) AUTHORIZATION
OF
APPROPRIATIONS.— 
There is authorized to be appropriated to the Ad-
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ministrator $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. 
Æ 
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