Title: COVID-19-Impacted Small Business Opportunity Zone Act
Policy area: Taxation

Summary:
COVID-19-Impacted Small Business Opportunity Zone Act
This bill designates certain small businesses affected by COVID-19 (i.e., coronavirus disease 2019) as qualified opportunity zone businesses. This designation makes certain tax benefits, including favorable capital gains treatment, available to affected businesses that have experienced supply chain disruptions, staffing challenges, decrease in sales or customers, or partial or full suspension of business.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6529 Introduced in House (IH)]

<DOC>






116th CONGRESS
  2d Session
                                H. R. 6529

 To amend the Internal Revenue Code of 1986 to modify the opportunity 
                          zone tax incentives.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 17, 2020

Mr. Curtis (for himself and Mr. Cuellar) 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 modify the opportunity 
                          zone tax incentives.

    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 ``COVID-19-Impacted Small Business 
Opportunity Zone Act''.

SEC. 2. MODIFICATION OF OPPORTUNITY ZONE TAX INCENTIVES.

    (a) Small Businesses Affected by COVID-19 Treated as Qualified 
Opportunity Zone Businesses.--Section 1400Z-2(d)(3) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
subparagraph:
                    ``(C) Certain small businesses affected by covid-19 
                treated as qualified opportunity zone businesses.--
                            ``(i) In general.--Subparagraph (A)(i) 
                        shall not apply with respect to any qualified 
                        small business.
                            ``(ii) Qualified small business.--For 
                        purposes of this subparagraph, the term 
                        `qualified small business' means any small 
                        business if such small business has experienced 
                        any of the following as a result of the spread 
                        of, or of the public's or any government's 
                        response to, COVID-19--
                                    ``(I) supply chain disruptions, 
                                including changes in quantity, lead 
                                time, delay, or the number of shipments 
                                of components; changes in the quality 
                                of supplied components; and disruption 
                                by reason of compromised payment 
                                networks or other technological 
                                reasons,
                                    ``(II) staffing challenges,
                                    ``(III) decrease in sales or 
                                customers, or
                                    ``(IV) partial or full suspension 
                                of business.
                            ``(iii) Small business.--For purposes of 
                        this subparagraph, the term `small business' 
                        means any trade or business if the gross 
                        receipts (as determined under the rules of 
                        section 448(c)(3), without regard to 
                        subparagraph (A) thereof) of such trade or 
                        business (when combined with all related trades 
                        or businesses) for the relevant taxable year do 
                        not exceed $999,999. For purposes of the 
                        preceding sentence, a trade or business shall 
                        be treated as related if it is a trade or 
                        business of the same person or of any person 
                        treated as one person under section 448(c)(2). 
                        For purposes of this clause, the term `relevant 
                        taxable year' means the last taxable year which 
                        ends before the date on which the qualified 
                        opportunity zone fund acquires the qualified 
                        opportunity fund property to which such trade 
                        or business relates.
                            ``(iv) Application of subparagraph.--Clause 
                        (i) shall only apply with respect to qualified 
                        opportunity fund property acquired by a 
                        qualified opportunity zone fund during the 1-
                        year period beginning on the date of the 
                        enactment of this subparagraph.''.
    (b) Application of Capital Gains Rate for Taxable Year in Which 
Investment Is Acquired.--Section 1400Z-2(b) of such Code is amended by 
adding at the end the following new paragraph:
            ``(3) Application of capital gains rates.--The rate of tax 
        which applies to gain which is included in income as provided 
        in this subsection shall not exceed the rate applicable to such 
        gain in the taxable year in which the investment was acquired. 
        Proper adjustments shall be made in the application of section 
        1(h) for the taxable year in which such gain is included in 
        gross income to take into account the preceding sentence.''.
    (c) Extension of Deferral of Gain Invested in Opportunity Zones.--
Section 1400Z-2(b)(1)(B) of such Code is amended to read as follows:
                    ``(B) the date which is 7 years after the date on 
                which such investment was acquired.''.
    (d) Exemption From Tax for Investments Held for at Least 10 Years 
Without Regard to Whether Investment Consists of Reinvested Gain.--
Section 1400Z-2(c) of such Code is amended by striking ``any 
investment'' and inserting ``any investment in a qualified opportunity 
fund (without regard to whether such investment is described in 
subsection (a))''.
    (e) Effective Dates.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall apply to 
        investments in qualified opportunity funds made after the date 
        of the enactment of this Act.
            (2) Small businesses affected by covid-19 treated as 
        qualified opportunity zone businesses.--The amendment made by 
        subsection (a) shall apply to property acquired by qualified 
        opportunity zone funds after the date of the enactment of this 
        Act.
                                 <all>