Small Business PPE Tax Credit Act
Bill: H.R.885 | Sponsor: Rep. Lawrence, Brenda L. (D-MI)
Policy area: Taxation

Summary:
Small Business PPE Tax Credit Act
This bill allows certain small businesses a tax credit for qualified personal protective equipment expenses, up to $25,000 in a taxable year. The entities eligible for such credit include farms, veterans organizations, and tribal business concerns. The bill defines qualified personal protective equipment expenses to include the cost of equipment for reducing the risk of coronavirus (i.e., the virus that causes COVID-19) transmission, including gloves, medical masks and protective gear, and cleaning supplies.

To amend the Internal Revenue Code of 1986 to provide tax credits for 
    personal protective equipment to small businesses, non-profits, 
 independent contractors, veterans' organizations, and farmers, among 
other entities, in any year in which the President declares a national 
                    emergency relating to COVID-19.

    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 ``Small Business PPE Tax Credit Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) On January 21, 2020, the United States confirmed the 
        Nation's first case of the 2019 novel coronavirus, which 
        presents as the disease COVID-19.
            (2) On March 11, 2020, the World Health Organization 
        upgraded the COVID-19 outbreak from global health emergency 
        status to a pandemic.
            (3) On March 15, 2020, the Centers for Disease Control and 
        Prevention recommended a restriction on gatherings of 50 or 
        more people in the United States.
            (4) Beginning in mid-March, the administration issued new 
        guidelines on the pandemic and called for nationwide social 
        distancing, among other precautions, to slow the spread of 
        COVID-19.
            (5) On March 17, 2020, Dr. Anthony Fauci, in his capacity 
        as Director of the National Institute of Allergy and Infectious 
        Diseases, explained that ``social distancing is really physical 
        separation of people, wherein circumstances where there are 
        crowds, you remove yourself from very close contact.''
            (6) Most Governors executed orders in States across the 
        country to close or restrict operations of business across 
        various industries on a temporary basis, in an effort to 
        promote social distancing, stymie the rapid spread of the 
        coronavirus, and flatten the curve so as not to overwhelm the 
        Nation's health care system's capacity.
            (7) Those closures or operating limitations have caused 
        significant strain on America's small businesses in the 
        interest of public health.
            (8) Small businesses are the engine of the United States 
        economy, comprising 99 percent of all business ventures in the 
        United States and accounting for half of the United States 
        economy.
            (9) In order to safely resume full operations, these small 
        businesses need access to personal protective equipment; in 
        some cases, States are requiring employers and employees use 
        this personal protective equipment in order to allow public 
        entry.
            (10) Due to the fiscal strain of pandemic-related losses on 
        these small businesses, they cannot and should not bear the 
        financial burden of acquiring personal protective equipment 
        without relief.
            (11) Providing relief through a tax credit for the purchase 
        and use of personal protective equipment will directly support 
        small businesses returning to and exceeding pre-COVID-19 
        pandemic production levels.
            (12) At a Small Business Committee forum on May 28, 2020, 
        Mr. Charles ``Tee'' Rowe, President and Chief Executive Officer 
        of America's SBDC, testified to the potential value of such 
        credits.
            (13) Personal protective equipment tax credits will be 
        instrumental in safely and responsibly restarting the engine of 
        the United States economy.

SEC. 3. PERSONAL PROTECTIVE EQUIPMENT TAX CREDIT.

    (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. PERSONAL PROTECTIVE EQUIPMENT CREDIT.

    ``(a) Allowance of Credit.--For purposes of section 38, the 
personal protective equipment credit determined under this section for 
the taxable year is an amount equal to the amount paid by an eligible 
taxpayer in carrying on any trade or business for qualified personal 
protective equipment expenses during such year.
    ``(b) Maximum Credit.--The credit determined under this section 
with respect to any eligible taxpayer for any taxable year shall not 
exceed $25,000.
    ``(c) Definition and Special Rules.--For purposes of this section--
            ``(1) Eligible taxpayer.--
                    ``(A) In general.--The term `eligible taxpayer' 
                means--
                            ``(i) a small business concern,
                            ``(ii) any business concern (including an 
                        enterprise that is engaged in the business of 
                        production of food and fiber, ranching and 
                        raising of livestock, aquaculture, and all 
                        other farming and agricultural related 
                        industries), or Tribal business concern that 
                        employs not more than the greater of--
                                    ``(I) 500 employees, or
                                    ``(II) if applicable, the size 
                                standard in number of employees 
                                established by the Small Business 
                                Administration for the industry in 
                                which such business concern, veterans 
                                organization, or Tribal business 
                                concern operates, or
                            ``(iii) an individual who operates under a 
                        sole proprietorship, as an independent 
                        contractor, or as a self-employed individual.
                    ``(B) Small business concern.--The term `small 
                business concern' has the meaning given such term under 
                section 3 of the Small Business Act (15 U.S.C. 632), 
                and also includes--
                            ``(i) any business concern that employs not 
                        more than 500 employees per physical location 
                        of such business concern and that is assigned a 
                        North American Industry Classification System 
                        code beginning with 72,
                            ``(ii) any business concern operating as a 
                        franchise that is assigned a franchise 
                        identifier code by the Small Business 
                        Administration, and
                            ``(iii) any business concern that receives 
                        financial assistance from a company licensed 
                        under section 301 of the Small Business 
                        Investment Act of 1958 (15 U.S.C. 681).
                    ``(C) Documentation requirements.--The Secretary 
                may establish such documentation requirements as are 
                necessary to determine eligibility for a credit under 
                this section.
            ``(2) Qualified personal protective equipment expenses.--
        The term `qualified personal protective equipment expenses' 
        includes amounts paid or incurred--
                    ``(A) for the purpose of reducing the risk of 
                Coronavirus Disease 2019 (COVID-19) transmission 
                between people on the premises of the business of the 
                taxpayer, including--
                            ``(i) gloves, medical masks, N-95 
                        respirators, eye protection, gowns and aprons, 
                        boots or closed-toe work shoes, cleaning 
                        detergents, hand sanitizers, cleaning products 
                        and tools,
                            ``(ii) retrofitting or installation of 
                        equipment, and
                            ``(iii) any other relevant expense the 
                        Secretary, in consultation with the Secretary 
                        of Health and Human Services, determines 
                        necessary, and
                    ``(B) at any time during a year in which, with 
                respect to COVID-19--
                            ``(i) the President declares a national 
                        emergency under the National Emergencies Act 
                        (50 U.S.C. 1601 et seq.), or
                            ``(ii) an emergency involving Federal 
                        primary responsibility is determined to exist 
                        by the President under the section 501(b) of 
                        the Robert T. Stafford Disaster Relief and 
                        Emergency Assistance Act (42 U.S.C. 5191(b)).
    ``(d) Denial of Double Benefit.--No deduction shall be allowed 
under this chapter for any amount taken into account in determining the 
credit under this section.
    ``(e) Denial of Credit for Counterfeit Items.--No credit shall be 
allowed under this section with respect to any item if the Secretary 
determines such item to be counterfeit or sold or distributed in bad 
faith.''.
    (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) the personal protective equipment credit determined 
        under section 45U.''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 is amended by adding at the end 
the following new item:

``Sec. 45U. Personal Protective Equipment Credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to expenses made or incurred after December 31, 2020, in taxable 
years ending after such date.
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