119th (2025–2027)
H.R. 7230
This bill creates a new tax credit to encourage the use of domestically grown cotton in consumer products. Companies that sell finished cotton products made from U.S.-grown cotton can claim a credit equal to a percentage of the cotton's market value, with the percentage ranging from 18% to 24% depending on where the cotton is processed. Products made with U.S. cotton processed only in America or in countries with U.S. free trade agreements receive the higher 24% credit, while those processed elsewhere receive 18%. To qualify, cotton must be grown in the U.S., assigned an identification number for tracking, and digitally traced through the entire supply chain. Additionally, companies receive even larger credits—up to 6.5 times the base amount—if they use cotton yarn or fabric manufactured in the United States. The credit applies to eligible products sold after the bill's enactment and is intended to boost demand for American cotton while establishing transparent supply chain documentation.