Hospitality and Commerce Job Recovery Act of 2021
Bill: S.477 | Sponsor: Sen. Cortez Masto, Catherine (D-NV)
Policy area: Taxation

Summary:
Hospitality and Commerce Job Recovery Act of 2021
This bill extends existing and establishes new tax credits that assist the hospitality and restaurant industry. Specifically, it

To amend the Internal Revenue Code of 1986 to create a refundable tax 
        credit for travel expenditures, and for other purposes.

    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 ``Hospitality and Commerce Job 
Recovery Act of 2021''.

SEC. 2. ESTABLISHMENT OF TAX CREDIT TO SUPPORT THE CONVENTION AND TRADE 
              SHOW INDUSTRY.

    (a) In General.--For purposes of section 38 of the Internal Revenue 
Code of 1986, the convention and trade show restart credit shall be 
treated as a credit listed at the end of subsection (b) of such 
section. For purposes of this section, the convention and trade show 
restart credit for any taxable year is an amount equal to the sum of--
            (1) 50 percent of the qualified participation costs paid or 
        incurred by a taxpayer during such taxable year, and
            (2) in the case of an eligible provider, 100 percent of the 
        qualified restart costs paid or incurred by such provider 
        during such taxable year.
    (b) Qualified Participation Costs.--For purposes of this section, 
the term ``qualified participation costs'' means any costs or expenses 
paid or incurred by the taxpayer after December 31, 2020, for any 
employee or officer of the taxpayer to attend or participate in a 
qualified event, including registration fees, lodging, and costs with 
respect to carrying out an exhibition relating to the taxpayer. Such 
term shall not include any costs which are not necessary for the 
attendance or participation of such employee or officer at such event.
    (c) Eligible Provider; Qualified Restart Costs.--In this section--
            (1) Eligible provider.--The term ``eligible provider'' 
        means any person which--
                    (A) provides facilities at which a qualified event 
                may be held, or
                    (B) sponsors, operates, or is otherwise responsible 
                for the administration of a qualified event.
            (2) Qualified restart costs.--The term ``qualified restart 
        costs'' means any costs paid or incurred by an eligible 
        provider after December 31, 2020, in reopening after such date 
        a facility described in paragraph (1)(A) which was closed or 
        forced to reduce services due to the virus SARS-CoV-2 or 
        coronavirus disease 2019 (referred to in this section as 
        ``COVID-19''), including--
                    (A) any renovation, remediation, personal 
                protective equipment, cleaning, or additional labor and 
                rental costs related to preventing individuals present 
                in such facility from contracting COVID-19, and
                    (B) any testing of employees of the taxpayer or 
                guests of such facility for symptoms of COVID-19.
    (d) Qualified Event.--
            (1) In general.--In this section, the term ``qualified 
        event'' means--
                    (A) a convention, seminar, or similar meeting (as 
                such terms are used in section 274 of the Internal 
                Revenue Code of 1986),
                    (B) a business meeting (as such term is used in 
                such section), or
                    (C) a trade show,
        which takes place after December 31, 2021.
            (2) Trade show.--For purposes of this subsection, the term 
        ``trade show'' means any exhibition at which different 
        businesses within a particular industry promote their products 
        and services.
    (e) Denial of Double Benefit.--No deduction shall be allowed under 
any provision of chapter 1 of the Internal Revenue Code of 1986 with 
respect to any amount taken in account in determining the credit 
allowed to a taxpayer under this section.
    (f) Location Requirement.--No credit shall be allowed under this 
section with respect to any qualified event unless such event is held 
within the United States (including any territory or possession of the 
United States).
    (g) Payroll Credit for Nonprofit Employers.--
            (1) In general.--In the case of an organization which is 
        described in section 501(c) of the Internal Revenue Code of 
        1986 and exempt from tax under section 501(a) of such Code, the 
        credit determined under this section shall be allowed as a 
        credit against applicable employment taxes paid by such 
        organization for calendar quarters in the taxable year, and not 
        treated as a credit listed at the end of section 38(b) of such 
        Code.
            (2) Limitations and refundability.--
                    (A) Credit limited to employment taxes.--The credit 
                allowed by paragraph (1) with respect to calendar 
                quarters in any taxable year shall not exceed the 
                applicable employment taxes (reduced by any credits 
                allowed under subsections (e) and (f) of section 3111 
                of the Internal Revenue Code of 1986 and sections 7001 
                and 7003 of the Families First Coronavirus Response 
                Act) on the wages paid with respect to the employment 
                of all the employees of the organization for such 
                taxable year.
                    (B) Refundability of excess credit.--
                            (i) In general.--If the amount of the 
                        credit under paragraph (1) exceeds the 
                        limitation of subparagraph (A) for any calendar 
                        quarter, such excess shall be treated as an 
                        overpayment that shall be refunded under 
                        sections 6402(a) and 6413(b) of the Internal 
                        Revenue Code of 1986.
                            (ii) Treatment of payments.--For purposes 
                        of section 1324 of title 31, United States 
                        Code, any amounts due to the employer under 
                        this paragraph shall be treated in the same 
                        manner as a refund due from a credit provision 
                        referred to in subsection (b)(2) of such 
                        section.
            (3) Applicable employment taxes.--For purposes of this 
        subsection, the term ``applicable employment taxes'' means the 
        following:
                    (A) The taxes imposed under section 3111(a) of the 
                Internal Revenue Code of 1986.
                    (B) So much of the taxes imposed under section 
                3221(a) of such Code as are attributable to the rate in 
                effect under section 3111(a) of such Code.
    (h) Regulations and Guidance.--The Secretary of the Treasury (or 
the Secretary's delegate) may prescribe such regulations and other 
guidance as may be appropriate or necessary to carry out the purposes 
of this section.
    (i) Termination.--This section shall not apply to any costs paid or 
incurred in taxable years beginning after December 31, 2024.

SEC. 3. EXTENSION OF EMPLOYEE RETENTION TAX CREDIT.

    (a) In General.--Section 2301(m) of the CARES Act (Public Law 116-
136) is amended by striking ``July 1, 2021'' and inserting ``January 1, 
2022''.
    (b) Effective Date.--The amendments made by this section shall 
apply to calendar quarters beginning after June 30, 2021.

SEC. 4. SUSPENSION OF LIMITATION ON ENTERTAINMENT, ETC. EXPENSES 
              RELATED TO TRADE OR BUSINESS.

    (a) In General.--Section 274 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(q) Special Rules for Taxable Years 2021 Through 2022.--In the 
case of a taxable year beginning after December 31, 2020, and before 
January 1, 2023--
            ``(1) subsection (a)(1)(A) shall not apply to any expense 
        if the taxpayer establishes that the item was directly related 
        to, or, in the case of an item directly preceding or following 
        a substantial and bona fide business discussion (including 
        business meetings at a convention or otherwise), that such item 
        was associated with, the active conduct of the taxpayer's trade 
        or business, except that the deduction under this section with 
        respect to any such expense shall in no event exceed the 
        portion of such expense with respect to which the taxpayer so 
        establishes,
            ``(2) in the case of a club, subsection (a)(1)(B) shall not 
        apply if the taxpayer establishes that the facility was used 
        primarily for the furtherance of the taxpayer's trade or 
        business and that the item was directly related to the active 
        conduct of such trade or business,
            ``(3) no deduction or credit shall be allowed for any item 
        (not including any qualified nonpersonal use vehicle (as 
        defined in subsection (i)) with respect to an activity which is 
        of a type generally considered to constitute entertainment, 
        amusement, or recreation, or with respect to a facility used in 
        connection with such an activity, unless the taxpayer 
        substantiates by adequate records or by sufficient evidence 
        corroborating the taxpayer's own statement--
                    ``(A) the amount of such expense or other item,
                    ``(B) the time and place of the entertainment, 
                amusement, recreation, or use of the facility or 
                property,
                    ``(C) the business purpose of the expense or other 
                item, and
                    ``(D) the business relationship to the taxpayer of 
                the persons entertained or using the facility or 
                property,
        except as the Secretary may by regulations provide in the case 
        of an expense which does not exceed an amount prescribed 
        pursuant to such regulations,
            ``(4) in determining the amount allowable as a deduction 
        under this chapter for any ticket for any activity or facility 
        described in paragraph (3), the amount taken into account shall 
        not exceed the face value of such ticket, except that--
                    ``(A) this paragraph shall not apply to any ticket 
                for any sports event--
                            ``(i) which is organized for the primary 
                        purpose of benefiting an organization which is 
                        described in section 501(c)(3) and exempt from 
                        tax under section 501(a),
                            ``(ii) all of the net proceeds of which are 
                        contributed to such organization, and
                            ``(iii) which utilizes volunteers for 
                        substantially all of the work performed in 
                        carrying out such event, and
                    ``(B) in the case of a skybox or other private 
                luxury box leased for more than 1 event, the amount 
                allowable as a deduction under this chapter with 
                respect to such events shall not exceed the sum of the 
                face value of non-luxury box seat tickets for the seats 
                in such box covered by the lease (determined by 
                treating 2 or more related leases as 1 lease),
            ``(5) the amount allowable as a deduction under this 
        chapter for any item with respect to an activity which is of a 
        type generally considered to constitute entertainment, 
        amusement, or recreation, or with respect to a facility used in 
        connection with such activity, shall not exceed 50 percent of 
        the amount of such expense or item which would (but for this 
        paragraph) be allowable as a deduction under this chapter, and
            ``(6) paragraph (5) shall not apply to any expense if--
                    ``(A) such expense is described in paragraph (2), 
                (3), (4), (7), (8), or (9) of subsection (e),
                    ``(B) such expense is excludable from the gross 
                income of the recipient under section 132 by reason of 
                subsection (e) thereof (relating to de minimis 
                fringes), or
                    ``(C) such expense is covered by a package 
                involving a ticket described in paragraph (4)(A).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2020.

SEC. 5. ESTABLISHMENT OF TAX CREDIT TO SUPPORT THE RESTAURANT INDUSTRY.

    (a) In General.--For purposes of section 38 of the Internal Revenue 
Code of 1986, in the case of an eligible taxpayer, the restaurant and 
dining restart credit shall be treated as a credit listed at the end of 
subsection (b) of such section. For purposes of this section, the 
restaurant and dining restart credit for any taxable year is an amount 
equal to the qualified restart costs paid or incurred by the eligible 
taxpayer during the taxable year.
    (b) Eligible Taxpayer.--For purposes of this section, the term 
``eligible taxpayer'' means a taxpayer--
            (1) which owns a trade or business devoted to preparation 
        of food and beverages for on-premises consumption or carry out 
        (not including a trade or business which sells items other than 
        prepared food and beverages), or
            (2) which owns property on which such a trade or business 
        operates, if more than 50 percent of the square footage of such 
        property is devoted to preparation of, and seating for on-
        premises consumption of, prepared meals.
    (c) Qualified Restart Costs.--For purposes of this section, the 
term ``qualified restart costs'' means any costs paid or incurred by an 
eligible taxpayer on or after the date of the enactment of this Act in 
reopening a trade or business or property described in subsection (b), 
or increasing meal and beverage services provided by such trade or 
business or at such property, which was closed or forced to reduce 
services due to the virus SARS-CoV-2 or coronavirus disease 2019 
(referred to in this section as ``COVID-19''), including--
            (1) any renovation, remediation, or additional labor and 
        rental costs related to preventing individuals present at such 
        trade or business or on such property from contracting COVID-
        19, and
            (2) any testing of employees of the eligible taxpayer or 
        guests of such trade or business or such property for symptoms 
        of COVID-19.
For purposes of the preceding sentence, a trade or business shall be 
treated as having reduced services if such trade or business reduced 
hours of operation, number of employees or employee hours, or capacity 
of seating areas, closed seating areas, or took any other measures 
which reduced services provided or operations of the trade or business 
as determined by the Secretary of the Treasury.
    (d) Denial of Double Benefit.--No deduction shall be allowed under 
any provision of chapter 1 of the Internal Revenue Code of 1986 with 
respect to any amount taken in account in determining the credit 
allowed to a taxpayer under this section.
    (e) Regulations and Guidance.--The Secretary of the Treasury (or 
the Secretary's delegate) may prescribe such regulations and other 
guidance as may be appropriate or necessary to carry out the purposes 
of this section.
    (f) Termination.--This section shall not apply to any costs paid or 
incurred in taxable years beginning after December 31, 2022.

SEC. 6. CREDIT FOR TRAVEL EXPENDITURES.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 36 the following new section:

``SEC. 36A. CREDIT FOR TRAVEL EXPENDITURES.

    ``(a) Allowance of Credit.--In the case of an individual who pays 
or incurs any qualified travel expenses during a taxable year, there 
shall be allowed as a credit against the tax imposed by this subtitle 
for such taxable year an amount equal to 50 percent of such expenses.
    ``(b) Limitations.--
            ``(1) Dollar limitation.--The credit allowed under 
        subsection (a) for any taxable year shall not exceed the sum 
        of--
                    ``(A) $1,500 ($750 in the case of a married 
                individual filing a separate return), plus
                    ``(B) $500 for each qualifying child (as defined in 
                section 152(c)) of the individual, but not to exceed 
                $1,500.
            ``(2) Limitation based on adjusted gross income.--
                    ``(A) In general.--The amount allowable as a credit 
                under subsection (a) (after the application of 
                paragraph (1) and determined without regard to this 
                paragraph) for the taxable year shall be reduced (but 
                not below zero) by $2 for every $50 by which the 
                taxpayer's modified adjusted gross income for such 
                taxable year exceeds $75,000 ($150,000 in the case of a 
                joint return).
                    ``(B) Modified adjusted gross income.--The term 
                `modified adjusted gross income' means the adjusted 
                gross income of the taxpayer for the taxable year 
                increased by any amount excluded from gross income 
                under section 911, 931, or 933.
    ``(c) Qualified Travel Expense.--For purposes of this section--
            ``(1) In general.--The term `qualified travel expense' 
        means any amount paid or incurred for travel within the United 
        States which is at least 50 miles from the individual's home 
        and includes an overnight stay, including amounts paid or 
        incurred for food and beverages, lodging, recreation, 
        transportation, amusement or entertainment, including live 
        entertainment and sporting events, and gasoline.
            ``(2) Minimum amount.--Any expense (determined by treating 
        all items on a single receipt as 1 expense) which is less than 
        $25 shall not be taken into account under paragraph (1).
            ``(3) United states.--The term `United States' includes the 
        territories and possessions of the United States.
            ``(4) Exception.--For purposes of paragraph (1), amounts 
        paid with respect to a residence or other lodging owned by the 
        individual shall not be treated as qualified travel expenses.
    ``(d) Election To Carry Credit to Preceding Year.--At the election 
of the taxpayer, any credit allowable under this section for a taxable 
year may be carried back (in its entirety) to the preceding taxable 
year and treated as a credit allowed under this subpart for such year.
    ``(e) Restrictions.--No credit shall be allowed to an individual 
under subsection (a) with respect to a qualified travel expense if--
            ``(1) the individual receives a refund or reimbursement 
        from any person for the expense,
            ``(2) a deduction is allowed under section 162 with respect 
        to the expense,
            ``(3) a deduction under section 151 with respect to 
        individual is allowable to another taxpayer for such taxable 
        year, or
            ``(4) the individual does not attach sufficient evidence of 
        the expense, as prescribed by the Secretary, to the return of 
        tax for such taxable year.
    ``(f) Termination.--This section shall not apply to any qualified 
travel expenses paid or incurred after December 31, 2023.''.
    (b) Clerical Amendment.--The table of sections for subpart C of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after the item relating to section 36 the 
following new item:
    (c) Conforming Amendment.--Section 6211(b)(4)(A) of the Internal 
Revenue Code of 1986 is amended by inserting ``, 36A'' after ``36''.
    (d) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after December 31, 2020.

SEC. 7. ESTABLISHMENT OF TEMPORARY TAX CREDIT FOR UNMERCHANTABLE 
              INVENTORY.

    (a) In General.--For purposes of section 38 of the Internal Revenue 
Code of 1986, in the case of an eligible taxpayer, the unmerchantable 
inventory credit shall be treated as a credit listed at the end of 
subsection (b) of such section. For purposes of this subsection, the 
unmerchantable inventory credit for any taxable year beginning after 
December 31, 2019, and ending before April 1, 2021, shall be equal to 
90 percent of the qualified unmerchantable inventory costs incurred by 
the eligible taxpayer during such taxable year.
    (b) Eligible Taxpayer.--For purposes of this section, the term 
``eligible taxpayer'' means any taxpayer which--
            (1) on March 13, 2020, was engaged in an active trade or 
        business of selling food or beverage inventory as a 
        manufacturer, importer, wholesale distributor, or retailer, and
            (2) with respect to such trade or business--
                    (A) on or after March 13, 2020, held qualified 
                unmerchantable inventory, or
                    (B) incurred costs described in subsection 
                (c)(1)(A)(i).
    (c) Qualified Unmerchantable Inventory Costs.--
            (1) In general.--For purposes of this section, the 
        qualified unmerchantable inventory costs incurred by an 
        eligible taxpayer during any taxable year shall be equal to--
                    (A) an amount equal to the sum of--
                            (i) any costs described in section 
                        263A(a)(2) of the Internal Revenue Code of 1986 
                        with respect to the purchase or acquisition of 
                        any qualified unmerchantable inventory during 
                        such taxable year,
                            (ii) any costs relating to disposal or 
                        destruction of any qualified unmerchantable 
                        inventory during such taxable year, and
                            (iii) any amount paid or credited by such 
                        eligible taxpayer during such taxable year to 
                        any other person for purposes of apportioning 
                        or sharing costs relating to products which, in 
                        the hands of such eligible taxpayer, would be 
                        deemed to be qualified unmerchantable 
                        inventory, minus
                    (B) an amount equal to the sum of--
                            (i) any amount received by such eligible 
                        taxpayer during such taxable year from any 
                        other person for purposes of apportioning or 
                        sharing costs with respect to qualified 
                        unmerchantable inventory,
                            (ii) any amounts compensated by insurance 
                        for any loss sustained by such eligible 
                        taxpayer during such taxable year with respect 
                        to qualified unmerchantable inventory, and
                            (iii) any amounts received under the 
                        Coronavirus Food Assistance Program under part 
                        9 of title 7, Code of Federal Regulations (or 
                        successor regulations).
            (2) Direct costs for manufacturers.--In the case of a 
        manufacturer, the costs described in paragraph (1)(A)(i) shall 
        include any transportation costs which would not otherwise have 
        been capitalized pursuant to section 263A of the Internal 
        Revenue Code of 1986.
    (d) Qualified Unmerchantable Inventory.--
            (1) In general.--For purposes of this section, the term 
        ``qualified unmerchantable inventory'' means any food or 
        beverage inventory which--
                    (A) was manufactured or acquired by the eligible 
                taxpayer, and
                    (B) became unmerchantable during the period 
                beginning on March 13, 2020, and ending on September 
                30, 2020.
            (2) Unmerchantable.--For purposes of this subsection, the 
        term ``unmerchantable'' shall include any food or beverage 
        products which cannot be sold due to--
                    (A) spoilage,
                    (B) expiration pursuant to the manufacturer code 
                date or applicable industry freshness standards, or
                    (C) a change or limitation in market conditions 
                resulting in the lack of a customary and reasonable 
                market for such products.
    (e) Election To Have Credit Not Apply.--
            (1) In general.--A taxpayer may elect to have this section 
        not apply for any taxable year.
            (2) Time for making election.--An election under paragraph 
        (1) for any taxable year may be made (or revoked) at any time 
        before the expiration of the 3-year period beginning on the 
        last date prescribed by law for filing the return for such 
        taxable year (determined without regard to extensions).
            (3) Manner of making election.--An election under paragraph 
        (1) (or revocation thereof) shall be made in such manner as the 
        Secretary of the Treasury, or the Secretary's delegate, may by 
        regulations prescribe.
    (f) Denial of Double Benefit.--No deduction shall be allowed under 
any provision of chapter 1 of the Internal Revenue Code of 1986 with 
respect to any amount taken in account in determining the credit 
allowed to a taxpayer under this section.
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