Title: Veteran Entrepreneurs Act of 2018
Policy area: Taxation

Summary:
Veteran Entrepreneurs Act of 2018
This bill amends the Internal Revenue Code to allow a business-related tax credit of up to $100,000 for 25% of the franchise fees paid or incurred by a 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 of the capital or profits interest of the franchisee.
The veteran may elect to transfer the credit to a 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.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 2950 Introduced in Senate (IS)]

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115th CONGRESS
  2d Session
                                S. 2950

  To amend the Internal Revenue Code of 1986 to allow credits for the 
                establishment of franchises by veterans.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 24, 2018

   Mr. Casey introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to allow credits for the 
                establishment of franchises by veterans.

    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 ``Veteran Entrepreneurs Act of 2018''.

SEC. 2. VETERANS FRANCHISE FEE 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. 45T. VETERANS FRANCHISE FEE CREDIT.

    ``(a) Veterans Franchise Fee Credit.--
            ``(1) In general.--For purposes of section 38, the veterans 
        franchise fee credit determined under this section for the 
        taxable year is an amount equal to 25 percent of the qualified 
        franchise fees paid or incurred by a veteran during the taxable 
        year.
            ``(2) Limitation.--The amount allowed as a credit under 
        paragraph (1) with respect to the purchase of any franchise 
        shall not exceed $100,000.
    ``(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 of the capital or profits interests of the franchise, the 
credit under subsection (a) shall be the credit amount determined under 
such subsection, multiplied by the same ratio as--
            ``(1) the stock or capital or profits interests of the 
        franchise held by veterans, bears
            ``(2) to 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' means any initial fee required by the 
franchisor when entering into a franchise agreement with a veteran as 
the franchisee.
    ``(d) Other Definitions.--For purposes of this section, the terms 
`franchise', `franchisee', `franchisor', and `initial fee' have the 
meanings given such terms in part 436 of title 16, Code of Federal 
Regulations (as in effect on January 1, 2018).
    ``(e) Veteran.--The term `veteran' has the meaning given such term 
by section 101 of title 38, United States Code.
    ``(f) Transfer of Credit.--
            ``(1) In general.--With respect to the credit allowed under 
        subsection (a) for any taxable year, in the case of a veteran 
        who--
                    ``(A) has received a reduction in the amount of the 
                qualified franchise fee otherwise required by the 
                franchisor, and
                    ``(B) elects application of this subsection for 
                such taxable year with respect to any portion of such 
                credit which is commensurate with the amount of the 
                reduction described in subparagraph (A),
        the franchisor, and not the veteran, shall be treated as the 
        taxpayer for purposes of this title with respect to such 
        portion of the credit.
            ``(2) Prohibition.--A franchisor may not require a veteran 
        to elect application of this subsection as a condition for 
        entering into a 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 
the Internal Revenue Code of 1986 is amended by striking ``plus'' at 
the end of paragraph (36), by striking the period at the end of 
paragraph (37) and inserting ``, plus'', and by adding at the end the 
following new paragraph:
            ``(38) the veterans franchise fee credit determined under 
        section 45T(a).''.
    (c) Clerical Amendment.--The table of sections for 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 item:

``Sec. 45T. Veterans franchise fee credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 2018.

SEC. 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 45T of 
the Internal Revenue Code of 1986 and other information about the 
program established under amendments made by this Act.
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