Official Summaries

Veterans Jobs Opportunity Act

This bill allows veteran-owned small businesses in underserved communities to claim a tax credit for qualified start-up expenses in the amount of 15% (up to $50,000) of such expenses. (Conditions and limitations apply.)

Under the bill, a business qualifies for the veteran small business start-up tax credit if it

• is owned and controlled by one or more veterans (or spouses of veterans);
• is located in a Historically Underutilized Business Zone (HUBZone) program area, empowerment zone or enterprise community, an area of low or moderate income, or county with persistent poverty; and
• has gross receipts for the prior tax year of $5 million or less (or employed 50 or fewer full-time employees in the prior tax year).

The bill generally defines qualified start-up expenses as amounts incurred or paid to

• investigate the creation or acquisition of the business,
• create the business,
• engage in activities for the production of income before the day the business opens, and
• purchase or lease real property (or purchase personal property) for use in the active conduct of a trade or business.

However, under the bill, the veteran small business start-up tax credit is allowed only in the first two tax years for which a business may claim a tax deduction for ordinary and necessary trade or business expenses.

Finally, the bill requires the Treasury Inspector General for Tax Administration to provide an evaluation of the veteran small business start-up tax credit to Congress every four years.

Current Full Text

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1298 Introduced in House (IH)]

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119th CONGRESS
  1st Session
                                H. R. 1298

    To amend the Internal Revenue Code of 1986 to establish a small 
   business start-up tax credit for veterans creating businesses in 
                        underserved communities.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 13, 2025

    Mr. Davis of North Carolina (for himself and Mr. Nunn of Iowa) 
 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 establish a small 
   business start-up tax credit for veterans creating businesses in 
                        underserved communities.

    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 ``Veterans Jobs Opportunity Act''.

SEC. 2. VETERAN SMALL BUSINESS START-UP 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. 45BB. VETERAN SMALL BUSINESS START-UP CREDIT.

    ``(a) In General.--For purposes of section 38, the veteran small 
business start-up credit determined under this section for any taxable 
year is an amount equal to 15 percent of so much of the qualified 
start-up expenditures paid or incurred by the taxpayer during such 
taxable year with respect to an applicable veteran-owned business as 
does not exceed $50,000.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Applicable veteran-owned small business.--The term 
        `applicable veteran-owned small business' means a small 
        business--
                    ``(A) owned and controlled by 1 or more veterans or 
                spouses of veterans, and
                    ``(B) the principal place of business of which is 
                in an underserved community.
            ``(2) Ownership and control.--The term `owned and 
        controlled' means--
                    ``(A) with respect to any of the individuals 
                described in paragraph (1)(A), that the conduct of any 
                trade or business of the small business is not a 
                passive activity (as defined in section 469(c)), and
                    ``(B) with respect to the small business--
                            ``(i) such small business is a sole 
                        proprietorship,
                            ``(ii) if such small business is a 
                        corporation, ownership (by vote or value) by 
                        the individuals described in paragraph (1)(A) 
                        of greater than 50 percent of the stock in such 
                        corporation, or
                            ``(iii) if such small business is a 
                        partnership, ownership by the individuals 
                        described in paragraph (1)(A) of greater than 
                        50 percent of the profits interests or capital 
                        interests in such partnership.
            ``(3) Qualified start-up expenditures.--The term `qualified 
        start-up expenditures' means--
                    ``(A) any start-up expenditures (as defined in 
                section 195(c)), and
                    ``(B) any amounts paid or incurred during the 
                taxable year for the purchase or lease of real 
                property, or the purchase of personal property, placed 
                in service during the taxable year and used in the 
                active conduct of a trade or business.
            ``(4) Small business.--
                    ``(A) In general.--The term `small business' means, 
                with respect to any taxable year, any person engaged in 
                a trade or business in the United States if--
                            ``(i) the gross receipts of such person for 
                        the preceding taxable year did not exceed 
                        $5,000,000, or
                            ``(ii) in the case of a person to which 
                        clause (i) does not apply, such person employed 
                        not more than 50 full-time employees during the 
                        preceding taxable year.
                    ``(B) Full-time employee.--For purposes of 
                subparagraph (A)(ii), an employee shall be considered 
                full-time if such employee is employed at least 30 
                hours per week for 20 or more calendar weeks in the 
                taxable year.
            ``(5) Underserved community.--The term `underserved 
        community' means any area located within--
                    ``(A) a HUBZone (as defined in section 3(p) of the 
                Small Business Act (15 U.S.C. 632(p)), as in effect on 
                the date of enactment of this section),
                    ``(B) an empowerment zone, or enterprise community, 
                designated under section 1391 (and without regard to 
                whether or not such designation remains in effect),
                    ``(C) an area of low income or moderate income (as 
                recognized by the Federal Financial Institutions 
                Examination Council), or
                    ``(D) a county with persistent poverty (as 
                classified by the Economic Research Service of the 
                Department of Agriculture).
            ``(6) Veteran or spouse of veteran.--The term `veteran or 
        spouse of a veteran' has the meaning given such term by section 
        7(a)(31)(G)(ii) of the Small Business Act (15 U.S.C. 
        636(a)(31)(G)(ii), as in effect on the date of enactment of 
        this section).
    ``(c) Special Rules.--For purposes of this section--
            ``(1) Election to take credit.--No credit shall be allowed 
        under subsection (a) for any expenditures unless the taxpayer 
        elects to have this section apply to such expenditures.
            ``(2) Year of election.--The taxpayer may elect the 
        application of this section only for the first 2 taxable years 
        for which ordinary and necessary expenses paid or incurred in 
        carrying on such trade or business are allowable as a deduction 
        by the taxpayer under section 162.
            ``(3) Controlled groups and common control.--All persons 
        treated as a single employer under subsections (a) and (b) of 
        section 52 shall be treated as 1 person.
            ``(4) No double benefit.--If a credit is determined under 
        this section with respect to any property, the basis of such 
        property shall be reduced by the amount of the credit 
        attributable to such property.''.
    (b) 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. 45BB. Veteran small business start-up credit.''.
    (c) Part of General Business Credit.--Section 38(b) of such Code is 
amended by striking ``plus'' at the end of paragraph (40), by striking 
the period at the end of paragraph (41) and inserting ``plus'', and by 
adding at the end the following new paragraph:
            ``(42) the veteran small business start-up credit 
        determined under section 45BB.''.
    (d) Report by Treasury Inspector General for Tax Administration.--
Every fourth year after the date of the enactment of this Act, the 
Treasury Inspector General for Tax Administration shall include in one 
of the semiannual reports under section 5 of the Inspector General Act 
of 1978 with respect to such year, an evaluation of the credit allowed 
under section 45BB of the Internal Revenue Code of 1986 (as added by 
this section), including an evaluation of the success of, and 
accountability with respect to, such credit.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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