New federal tax credit would reward sales of U.S.-grown cotton products
In committeeH.R. 7230Latest action
Sponsor: Gregory F. Murphy · Representative · NC
AIDecoded by AI · checked against the recordRead the official text
Official title: Buying American Cotton Act of 2026
119th Congress
Topics: Jobs & the economy
Introduced:
Read the official bill on Congress.govIn plain words
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HR 7230 offers businesses a 24% or 18% on finished products made with tracked, U.S.-grown cotton.
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What does this do?
HR 7230 creates a federal for businesses that sell finished products containing American-grown cotton. The credit rate is 24% when cotton is processed in the U.S. or in trade-agreement countries, and 18% when any processing occurs in a country without such an agreement. Businesses that convert U.S. cotton into yarn or fabric can receive credits up to 6.5 times the base amount for fabric.
Who does it affect?
The bill affects cotton farmers, textile mills, clothing manufacturers, and retailers across the U.S. supply chain. Any company selling a finished cotton-containing product at retail could claim the credit if the cotton was U.S.-grown and digitally tracked.
Why does it matter?
The credit is designed to make American cotton more financially attractive to manufacturers, though whether that results in lower consumer prices or more domestic jobs depends on how businesses respond. The credit can be claimed only once per batch of cotton, and companies must notify buyers about whether they intend to use it.
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Where does it stand?
- IntroducedJan 22, 2026
- House committeeYou are here · Jan 22, 2026
- House vote
- Senate
- The president's desk
Right now: a House committee is reviewing it. If the Senate changes it, it goes back to the House before reaching the president.
Latest action: — Referred to the House Committee on Ways and Means.