Buying American Cotton Act of 2025

Key Points

• Congress would create a business tax credit for the first sale of retail-ready products that contain U.S.-grown cotton.
• To qualify, the cotton must be digitally tracked through the supply chain to prove it started in the United States and to prevent double-claiming.
• The credit amount depends on how much U.S. cotton (by pounds) is in the product, a set percentage (24% or 18%), and an average cotton market price.
• Products processed only in the U.S., or also in certain trade-partner countries, get a higher credit rate than products processed in other countries.
• Companies could get an extra-boosted credit for using U.S.-made cotton yarn and especially U.S.-made cotton fabric; the credit would apply to sales starting Jan. 20, 2025.