1. Short title
This Act may be cited as the “Hospitality and Commerce Job Recovery Act of 2020”.
Hospitality and Commerce Job Recovery Act of 2020
A BILL
To amend the Internal Revenue Code of 1986 to create a refundable tax credit for travel expenditures, and for other purposes.
2. Establishment of tax credit to support the convention and trade show industry
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—
50 percent of the qualified participation costs paid or incurred by a taxpayer during such taxable year, and
in the case of an eligible provider, 100 percent of the qualified restart costs paid or incurred by such provider during such taxable year.
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 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 of such employee or officer at such event.
Eligible provider; qualified restart costs— In this section—
Eligible provider— The term eligible provider means any person which—
provides facilities at which a qualified event may be held, or
sponsors or is otherwise responsible for the administration of a qualified event.
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 (hereinafter referred to in this section as “COVID–19”), including—
any renovation, remediation, or additional labor and rental costs related to preventing individuals present in such facility from contracting COVID–19, and
any testing of employees of the taxpayer or guests of such facility for symptoms of COVID–19.
Qualified event—
In general— In this section, the term qualified event means—
a convention, seminar, or similar meeting (as such terms are used in section 274 of the Internal Revenue Code of 1986),
a business meeting (as such term is used in such section), or
a trade show,
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.
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.
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).
Payroll credit for nonprofit employers—
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.
Limitations and refundability—
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, sections 7001 and 7003 of the Families First Coronavirus Response Act, and section 2301 of the CARES Act) on the wages paid with respect to the employment of all the employees of the organization for such taxable year.
Refundability of excess credit—
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.
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.
Applicable employment taxes— For purposes of this subsection, the term applicable employment taxes means the following:
The taxes imposed under section 3111(a) of the Internal Revenue Code of 1986.
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.
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.
Termination— This section shall not apply to any costs paid or incurred in taxable years beginning after December 31, 2023.
3. Improvements to employee retention tax credit
Increase in credit percentage— Section 2301(a) of the CARES Act (Public Law 116–136) is amended by striking “50 percent” and inserting “80 percent”.
Increase in per employee limitation— Section 2301(b)(1) of the CARES Act is amended by striking “for all calendar quarters shall not exceed $10,000.” and inserting
“(A) $15,000 in any calendar quarter, and
“(B) $45,000 in the aggregate for all calendar quarters.”
Modification of threshold for treatment as a large employer—
In general— Section 2301(c)(3)(A) of the CARES Act is amended—
by striking “for which the average number of full-time employees (within the meaning of section 4980H of the Internal Revenue Code of 1986) employed by such eligible employer during 2019 was greater than 100” in clause (i) and inserting “which is a large employer”, and
by striking “for which the average number of full-time employees (within the meaning of section 4980H of the Internal Revenue Code of 1986) employed by such eligible employer during 2019 was not greater than 100” in clause (ii) and inserting “which is not a large employer”.
Large employer defined— Section 2301(c) of the CARES Act is amended by redesignating paragraph (6) as paragraph (7) and by inserting after paragraph (5) the following new paragraph:
“(6) Large employer—The term large employer means any eligible employer if—
“(A) the average number of full-time employees (as determined for purposes of section 4980H(c)(2) of the Internal Revenue Code of 1986) employed by such eligible employer during calendar year 2019 was greater than 1,500, and
“(B) the gross receipts (within the meaning of section 448(c) of the Internal Revenue Code of 1986) of such eligible employer during calendar year 2019 was greater than $41,500,000.”
Phase-In of eligibility based on reduction in gross receipts—
Reduction of decline in gross receipts necessary to qualify for credit— Section 2301(c)(2)(B) of the CARES Act is amended—
by striking “50 percent” in clause (i) and inserting “90 percent”, and
by striking “80 percent” in clause (ii) and inserting “90 percent”.
Phase-in of credit if reduction in gross receipts is less than 50 percent— Section 2301(c)(2) of the CARES Act is amended by adding at the end the following new subparagraph:
“(D) Phase-in of credit where business not suspended and reduction in gross receipts less than 50 percent
“(i) In general—In the case of any calendar quarter with respect to which an eligible employer would not be an eligible employer if subparagraph (B)(i) were applied by substituting “50 percent” for “90 percent”, the amount of the credit allowed under subsection (a) shall be reduced by the amount which bears the same ratio to the amount of such credit (determined without regard to this subparagraph) as—
“(I) the excess gross receipts percentage point amount, bears to
“(II) 40 percentage points.
“(ii) Excess gross receipts percentage point amount—For purposes of this subparagraph, the term excess gross receipts percentage point amount means, with respect to any calendar quarter, the excess of—
“(I) the lowest of the gross receipts percentage point amounts with respect to any calendar quarter occurring during the period described in clause (iii), over
“(II) 50 percentage points.
“(iii) Period described—For purposes of applying clause (ii) to any calendar quarter, the period described in this clause is the period ending with such calendar quarter and beginning with the first calendar quarter during the period described in subparagraph (B).
“(iv) Gross receipts percentage point amounts—For purposes of this subparagraph, the term gross receipts percentage point amount means, with respect to any calendar quarter, the percentage (expressed as a number of percentage points) obtained by dividing—
“(I) the gross receipts (within the meaning of subparagraph (B)) for such calendar quarter, by
“(II) the gross receipts for the same calendar quarter in calendar year 2019.”
Gross receipts of tax-exempt organizations— Section 2301(c)(2)(C) of the CARES Act is amended—
by striking “of such Code, clauses (i) and (ii)(I)” and inserting
“(i) clauses (i) and (ii)(I)”
by striking the period at the end and inserting “, and”, and
by adding at the end the following new clause:
“(ii) any reference in this section to gross receipts shall be treated as a reference to gross receipts within the meaning of section 6033 of such Code.”
Modification of treatment of health plan expenses—
In general— Section 2301(c)(5) of the CARES Act is amended to read as follows:
“(5) Wages
“(A) In general—The term wages means wages (as defined in section 3121(a) of the Internal Revenue Code of 1986) and compensation (as defined in section 3231(e) of such Code).
“(B) Allowance for certain health plan expenses
“(i) In general—Such term shall include amounts paid or incurred by the eligible employer to provide and maintain a group health plan (as defined in section 5000(b)(1) of the Internal Revenue Code of 1986), but only to the extent that such amounts are excluded from the gross income of employees by reason of section 106(a) of such Code.
“(ii) Allocation rules—For purposes of this section, amounts treated as wages under clause (i) shall be treated as paid with respect to any employee (and with respect to any period) to the extent that such amounts are properly allocable to such employee (and to such period) in such manner as the Secretary may prescribe. Except as otherwise provided by the Secretary, such allocation shall be treated as properly made if made on the basis of being pro rata among periods of coverage.”
Conforming amendment— Section 2301(c)(3) of the CARES Act is amended by striking subparagraph (C).
Qualified wages permitted To include amounts for tip replacement—
In general— Section 2301(c)(3)(B) of the CARES Act is amended by inserting “(including tips which would have been deemed to be paid by the employer under section 3121(q))” after “would have been paid”.
Conforming amendment— Section 2301(h)(2) of the CARES Act is amended by inserting “45B or” before “45S”.
Certain governmental employers eligible for credit—
In general— Section 2301(f) of the CARES Act is amended to read as follows:
“(f) Certain governmental employers
“(1) In general—The credit under this section shall not be allowed to the Federal Government or any agency or instrumentality thereof.
“(2) Exception—Paragraph (1) shall not apply to any organization which is described in section 501(c)(1) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code.
“(3) Special rules—In the case of any State government, Indian tribal government, or any agency, instrumentality, or political subdivision of the foregoing—
“(A) clauses (i) and (ii)(I) of subsection (c)(2)(A) shall apply to all operations of such entity, and
“(B) subclause (II) of subsection (c)(2)(A)(ii) shall not apply.”
Coordination with application of certain definitions—
In general— Section 2301(c)(5)(A) of the CARES Act, as amended by the preceding provisions of this Act, is amended by adding at the end the following: “For purposes of the preceding sentence (other than for purposes of subsection (b)(2)), wages as defined in section 3121(a) of the Internal Revenue Code of 1986 shall be determined without regard to paragraphs (1), (5), (6), (7), (8), (10), (13), (18), (19), and (22) of section 3212(b) of such Code (except with respect to services performed in a penal institution by an inmate thereof).”.
Conforming amendments— Sections 2301(c)(6) of the CARES Act is amended by striking “Any term” and inserting “Except as otherwise provided in this section, any term”.
Application of credit to employers of domestic workers—
In general— Section 2301(c)(2) of the CARES Act, as amended by the preceding provisions of this Act, is amended by adding at the end the following new subparagraph:
“(E) Employers of domestic workers—In the case of an employer with one or more employees who perform domestic service (within the meaning of section 3121(a)(7) of such Code) in the private home of such employer, with respect to such employees—
“(i) subparagraph (A) shall be applied—
“(I) by substituting “employing an employee who performs domestic service in the private home of such employer” for “carrying on a trade or business” in clause (i) thereof,
“(II) by substituting “such employment” for “the operation of the trade or business described in clause (i)” in clause (ii)(I) thereof, and
“(III) without regard to clause (ii)(II), and
“(ii) such employer shall be treated as a large employer.”
Denial of double benefit— Section 2301(h)(2) of the CARES Act, as amended by preceding provisions of this Act, is amended—
by striking “shall not be taken into account for purposes of” and inserting
“(A) for purposes of”
by striking the period at the end and inserting “, and”, and
by adding at the end the following:
“(B) if such wages are paid for domestic service described in subsection (c)(2)(E), as employment-related expenses for purposes of section 21 of such Code.”
Effective date— The amendments made by this section shall take effect as if included in section 2301 of the CARES Act.
4. Repeal of limitation on entertainment, etc. expenses related to trade or business
by redesignating subsection (o) as subsection (p),
by redesignating subsection (l), as added by section 13304(c) of Public Law 115–97, as subsection (o), and
by moving such subsection (o), as so redesignated, to the location after subsection (n).
Repeal— The amendments made by subsections (a) and (b) of section 13304 of Public Law 115–97 are repealed and the provisions of law amended by such subsections are restored as if such subsections had never been enacted.
Conforming amendment— Subsection (d) of section 13304 of Public Law 115–97 is amended by striking “subsection (o) as subsection (p)” in paragraph (1) and inserting “subsections (o) and (p) as subsections (p) and (q), respectively”.
Effective date—
In general— The amendments made by subsections (a) and (c) and the repeal made by subsection (b) shall take effect on the date of the enactment of this Act.
Application— The provisions of law as restored by subsection (b) shall apply to amounts paid or incurred in taxable years ending after the date of the enactment of this Act.
5. Establishment of tax credit to support the restaurant industry
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.
Eligible taxpayer— For purposes of this section, the term eligible taxpayer means a taxpayer—
which owns a trade or business devoted to preparation and on-premises consumption of food and beverages, or
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.
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—
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
any testing of employees of the eligible taxpayer or guests of such trade or business or such property for symptoms of COVID–19.
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.
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.
Termination— This section shall not apply to any costs paid or incurred in taxable years beginning after December 31, 2022.
6. Credit for travel expenditures
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:
“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.”
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:
Conforming amendment— Section 6211(b)(4)(A) of the Internal Revenue Code of 1986 is amended by inserting “, 36A” after “36”.
Effective date— The amendments made by this section shall apply to amounts paid or incurred after December 31, 2020.