Washington, DC – Today, Congresswoman Julia Brownley (D-CA) and Congresswoman Carol Miller (R-WV) introduced the Veteran Entrepreneurs Act, which reduces barriers to entrepreneurship by lowering upfront costs for veterans operating small businesses.
“As thousands of veterans continue to transition out of the military, successfully integrating them into civilian life should be a national priority,” said Congresswoman Brownley. “During their service, our veterans gain invaluable experience and skills that are highly beneficial in the sphere of business and in countless other professions. However, there is more work that needs to be done to ensure veterans are given the resources they need to harness their skills and be successful in the current job market. My bill allows for more veterans to more easily become entrepreneurs and small business owners, while also growing local economies in communities across our country.”
“Our veterans were willing to pay the ultimate sacrifice for the United States of America. As servicemembers, veterans have shown grit, perseverance, and dedication; we should be enabling, not hindering them when they come home and be a part of the American dream. The Veteran Entrepreneurs Act will help veterans open a small business that empowers the communities they protected overseas. I am grateful to work on this bipartisan legislation to help provide the support our veterans earned,” said Congresswoman Miller.
“This legislation is critical in helping veteran entrepreneurs get their start in owning their own business. Veterans make an excellent match for success in franchising, and this bill, along with programs like IFA’s VetFran, help support and expand veteran ownership of franchises,” said Mike Layman, Senior Vice President of Government Relations and Public Affairs for the International Franchise Association (IFA). “Thank you to Reps. Brownley and Miller for your leadership in working to provide veterans with the resources they need to pursue their dreams after their time in uniform.”
Background
Veterans have the leadership and skills needed for small business ownership, but frequently veterans are not financially able to manage the up-front costs. The leadership, technical skills, and familiarity with operating in a standardized network offered by veterans make them ideally suited for the franchise industry. In fact, according to a 2011 study conducted by PricewaterhouseCoopers, franchise businesses owned by veterans are typically much more successful than the average veteran-owned business, with higher gross receipts and more employees.
The Veteran Entrepreneurs Act promotes entrepreneurship for veterans by helping them take the next step into civilian life by making franchise ownership a financially accessible dream. This legislation would create a tax credit of up to 25% of initial franchise fees for veteran franchisees.
The addition of the Veterans Franchising Credit to Section 38 of the Code would:
- Create a capped tax credit worth up to 25% of the initial franchise fees: The bill provides a tax credit worth up to 25% of a veteran franchisee’s initial franchise fees. This 25% tax credit is available on up to $400,000 of qualified franchise fees, with a pro-rata reduction based on ownership percentage where the franchise is not 100% veteran-owned. Additionally, in accordance with existing law, the veteran would be able to carry forward the unused portion of the credit for up to 20 years, which will ensure that the veteran is able to make full use of the total value.
- Provide an alternative discount on franchise fees: While the Veterans Franchising Credit is a benefit provided directly to the franchisee him or herself, the veteran may alternatively benefit by electing to transfer the credit to an eligible franchisor in exchange for a commensurate discount in the franchise fee. This is a flexible alternative for franchisees with less access to capital up-front.
The text of the bill is available here.
###
Issues: 118th Congress, Jobs, Economy, and Small Business, Veterans' Affairs