‘(a) Veterans Franchise Fee Credit-
‘(1) IN GENERAL- For purposes of section 38 and subject to the limitation set forth in paragraph (2), the veterans franchise fee credit determined under this section for the taxable year is an amount equal to 25 percent of the qualified franchise fee paid or incurred by a qualified veteran in connection with the purchase of a franchise.
‘(2) LIMITATION- The amount of qualified franchise fee taken into account under paragraph (1) shall not exceed $400,000.
‘(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 the capital or profits interests of the franchisee, the credit under subsection (a) shall be the amount which bears the same ration to the amount determined under subsection (a) (without regard to this subsection) as--
‘(1) the stock or capital or profits interests of the franchise held by veterans, bears to
‘(2) 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 one-time 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 ‘franchise fee’ have the meanings given such terms in part 436 of title 16, Code of Federal Regulations.
‘(e) Veteran- The term ‘veteran’ has the meaning given such term by section 101 of title 38, United States Code.
‘(f) 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 such Code is amended by striking ‘plus’ at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting ‘, plus’, and by adding at the end the following new paragraph:
(c) Clerical Amendment- The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item:
(d) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2011.
U.S. Congress - Text of H.R.2888 as Introduced in House Help Veterans Own Franchises Act
