Section 1 Short title
This Act may be cited as the “Brick and Mortar Small Business Tax Credit Act of 2022”.
Brick and Mortar Small Business Tax Credit Act of 2022
A BILL
To amend the Internal Revenue Code of 1986 to establish a State and local general sales tax credit for small businesses.
Sec. 2 State and local general sales tax credit for small businesses
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:
“45U. State and local general sales tax credit for small businesses
“(a) Allowance of credit—For purposes of section 38, in the case of an eligible small business, the State and local general sales tax credit determined under this section for the taxable year is an amount equal to 5 percent of so much of the business gross receipts of the taxpayer for the taxable year as do not exceed $1,000,000 (regardless of whether such receipts are subject to a State or local general sales tax).
“(b) Phaseout of credit—If the business gross receipts of the taxpayer for the taxable year exceed $1,000,000, the credit otherwise determined under subsection (a) shall be reduced by an amount which bears the same ratio to the amount of such credit (determined without regard to this subsection) as—
“(1) such excess, bears to
“(2) $1,000,000.
“(c) Definitions and special rules
“(1) Definitions—For purposes of this section—
“(A) Eligible small business
“(i) In general—The term eligible small business means any taxpayer for any taxable year if—
“(I) the business gross receipts of such taxpayer for such taxable year do not exceed $2,000,000, and
“(II) more than 50 percent of such business gross receipts of such taxpayer for such taxable year were generated by in-person sales.
“(ii) Special rule for 2020 and 2021—In the case of any taxable year beginning in or with calendar year 2020 or 2021, clause (i)(II) shall be applied by substituting “any percentage of” for “more than 50 percent”.
“(B) Business gross receipts—The term “business gross receipts” means gross receipts received in the course of any trade or business (other than the trade or business of being an employee).
“(C) In-person sales—The term in-person sales means a sales transaction in which a customer pays for a good or service at a physical location of an eligible small business.
“(D) State—The term State means each of the several States, the District of Columbia, American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, Puerto Rico, the Virgin Islands of the United States, and any other territory of the United States.
“(2) Aggregation rules—All persons treated as a single employer under subsection (a) or (b) of section 52, or subsection (n) or (o) of section 414, shall be treated as one person.
“(d) Termination—Subsection (a) shall not apply with respect to any taxable year beginning after December 31, 2026.”
Credit made part of general business credit— Subsection (b) of section 38 of such Code is amended by striking “plus” at the end of paragraph (32), by striking the period at the end of paragraph (33) and inserting “, plus”, and by adding at the end the following new paragraph:
“(34) in the case of an eligible small business (as defined in section 45U), the State and local general sales tax credit determined under section 45U.”
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:
Public awareness campaign—
Requirement— The Administrator of the Small Business Administration, in consultation with the Internal Revenue Service, shall conduct a public awareness campaign to inform relevant small business concerns of the tax credit under section 45U of the Internal Revenue Code of 1986, as added by subsection (a).
Plan— Not later than 180 days after the date of the enactment of this Act, the Administrator shall submit to Congress a plan to implement the public awareness campaign under paragraph (1), including—
a description of the objectives and goals for the campaign; and
a description of how the Administrator will work with other departments and agencies of the Federal Government and with nongovernmental entities to inform relevant small business concerns of the tax credit described in paragraph (1).
Authorization of appropriations— There is authorized to be appropriated to the Administrator $500,000 for fiscal year 2022 to carry out the public awareness campaign under paragraph (1).
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2019.