Sec. 3. Business-related credit for disaster mitigation
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Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 45AA the following new section: For purposes of section 38, the disaster mitigation credit determined under this section for any taxable year is an amount equal to 25 percent of the qualified disaster mitigation expenditures made by the taxpayer during the taxable year. Subject to paragraph (2), the amount of the credit determined under subsection
(a)for any taxable year shall not exceed $5,000. The amount under paragraph
(1)for the taxable year shall be reduced (but not below zero) by an amount which bears the same ratio to the amount under such paragraph as— the amount (not less than zero) equal to the average gross receipts of the taxpayer over the 3 preceding taxable years minus $5,000,000, bears to $5,000,000. In the case of any taxable year after 2026, each of the dollar amounts under subparagraph
(A)shall be increased by an amount equal to— such dollar amount, multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2025 for calendar year 2016 in subparagraph (A)(ii) thereof. If any reduction determined under subparagraph
(A)is not a multiple of $50, or any increase under subparagraph
(B)is not a multiple of $50, such amount shall be rounded to the nearest multiple of $50. For purposes of this section, the term qualified disaster mitigation expenditure has the same meaning given such term under paragraph
(1)of section 25G(c), except that place of business shall be substituted for qualified dwelling unit each place it appears in such paragraph. For purposes of this section, an expenditure shall not be treated as a qualified disaster mitigation expenditure (as defined in paragraph (1)) unless the taxpayer's place of business is located— in the United States or in a territory of the United States, and in an area— in which a Federal natural disaster declaration has been made within the preceding 5-year period, which is adjacent to an area described in clause (i), which, during the taxable year or the period of the 5 taxable years preceding such taxable year, has received hazard mitigation assistance through the Federal Emergency Management Agency in regard to any natural disaster which, with respect to the expenditure described in section 25G(c)(1) which is made by the taxpayer, is applicable to such expenditure, or which, with respect to any taxable year, has been designated as a community disaster resilience zone (as defined in section 206(a) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. 5136(a) )). Rules similar to the rules of subsections
(d)through
(g)of section 25G shall apply for purposes of this section. No credit shall be determined under this section with respect to any expenditures for which a credit was allowed under section 25G. . Section 38(b) of such Code is amended by striking plus at the end of paragraph (40), by striking the period at the end of paragraph
(41)and inserting , plus , and by adding at the end the following new paragraph: the disaster mitigation credit determined under section 45BB(a). . The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 45AA the following new item: Sec. 45BB. Disaster mitigation credit. . The amendments made by this section shall apply to taxable years beginning after December 31, 2025.
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Sec. 3
Business-related credit for disaster mitigation
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