[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 477 Introduced in Senate (IS)]
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117th CONGRESS
1st Session
S. 477
To amend the Internal Revenue Code of 1986 to create a refundable tax
credit for travel expenditures, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 25, 2021
Ms. Cortez Masto (for herself and Mr. Cramer) 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 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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