Buying American Cotton Act of 2026
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed House
- Passed Senate
- To President
- Became Law
Overview
The Buying American Cotton Act of 2026 aims to encourage the use of cotton grown in the United States by establishing a domestic cotton consumption credit. This credit would be available to taxpayers who sell eligible articles made with qualified cotton, with the amount of the credit calculated based on the volume of cotton, an applicable percentage, and the cotton market price. The bill establishes specific requirements for defining ‘eligible article,’ ‘qualified cotton,’ and tracing the supply chain to ensure authenticity and domestic origin. It also provides increased credit amounts for cotton yarn and fabric.
Key provisions
- Establishes a domestic cotton consumption credit for taxpayers selling eligible articles made with qualified cotton.
- Defines ‘eligible article’ and ‘qualified cotton’ with specific requirements regarding origin, processing, and certification.
- Sets an applicable percentage for the credit based on the processing location of the cotton.
- Requires digital tracing of cotton through the supply chain to verify origin.
- Provides increased credit amounts for qualified cotton yarn and fabric.
- Allows taxpayers to elect to apply the credit separately to cotton yarn and fabric.
- Defines ‘free trade agreement’ and ‘unilateral preference program’ for credit calculation purposes.
- Modifies existing tax code sections to incorporate the new credit.
Who is affected
- Textile manufacturers
Bill text
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