Brick and Mortar Small Business Tax Credit Act of 2022
Bill: H.R.6428 | Sponsor: Rep. Khanna, Ro (D-CA)
Policy area: Taxation

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.

To amend the Internal Revenue Code of 1986 to establish a State and 
          local general sales tax credit for small businesses.

    Be it enacted by the Senate and House of Representatives 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 subchapter A of chapter 1 
of the Internal Revenue Code of 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 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' 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 beginning 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 receipts 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 physical location of an eligible 
                small business.
                    ``(D) State.--The term `State' means each of the 
                several States, the District of Columbia, American 
                Samoa, Guam, the Commonwealth 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 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'' 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 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 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), 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.
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