Buying American Cotton Act of 2026

Key Provisions

• Creates a new tax credit for businesses selling products made with U.S.-grown cotton.
• Sets the credit amount based on the volume of U.S. cotton, its market price, and where it was processed.
• Requires U.S.-grown cotton to have a permanent identification number or other proof of origin and be digitally traced through the supply chain.
• Offers a 24 percent credit for cotton processed in the U.S. or free trade agreement countries, and 18 percent for other countries.
• Lets businesses get a credit 1.6 times larger for U.S.-made cotton yarn and 6.5 times larger for U.S.-made cotton fabric.
• Adds this new credit to the general business credit, allowing it to be transferred to other taxpayers.