I 
119TH CONGRESS 
2D SESSION 
H. R. 7230 
To amend the Internal Revenue Code of 1986 to establish a domestic cotton 
consumption credit. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 22, 2026 
Mr. MURPHY (for himself, Ms. SEWELL, Mr. ROUZER, Mr. ESPAILLAT, Mr. 
KUSTOFF, Mr. DAVID SCOTT of Georgia, Mr. CAREY, Mr. DAVIS of 
North Carolina, Mr. THOMPSON of Pennsylvania, Mr. VICENTE GON-
ZALEZ of Texas, Mr. MOORE of Alabama, Ms. ADAMS, Mr. MANN, Ms. 
BROWN, Mr. ALLEN, Mr. FIGURES, Mr. PFLUGER, Mr. COSTA, Mr. 
CRAWFORD, Mr. BISHOP, Mr. AUSTIN SCOTT of Georgia, Mr. GRAY, Mr. 
JACKSON of Texas, and Mr. CARBAJAL) introduced the following bill; 
which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to establish 
a domestic cotton consumption credit. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Buying American Cot-
ton Act of 2026’’. 
SEC. 2. DOMESTIC COTTON CONSUMPTION CREDIT. 
(a) PURPOSE.—The purposes of this section are— 
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(1) to encourage the consumption of cotton 
which originated in the United States, and products 
which are made from such cotton, and 
(2) to document the processing of such cotton 
through a trustworthy supply chain tracing system. 
(b) ALLOWANCE OF CREDIT.—Subpart D of part IV 
of subchapter A of chapter 1 of the Internal Revenue Code 
of 1986 is amended by adding at the end the following 
new section: 
‘‘SEC. 45BB. DOMESTIC COTTON CONSUMPTION CREDIT. 
‘‘(a) CREDIT ALLOWED.—For purposes of section 38, 
the domestic cotton consumption credit determined under 
this section for any taxable year is an amount equal to 
the product of— 
‘‘(1) the documented volume of qualified cotton 
in an eligible article sold by the taxpayer in a quali-
fying sale during the taxable year, 
‘‘(2) the applicable percentage, and 
‘‘(3) the applicable cotton market price. 
‘‘(b) QUALIFYING SALE; APPLICABLE PERCENTAGE; 
APPLICABLE COTTON MARKET PRICE.— 
‘‘(1) QUALIFYING SALE.—For purposes of this 
section— 
‘‘(A) IN GENERAL.—The term ‘qualifying 
sale’ means, with respect to any eligible article, 
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the first sale of such eligible article to an unre-
lated person. 
‘‘(B) EXCEPTION.—Such term shall not in-
clude any sale for use or consumption of an eli-
gible article outside of the United States unless 
such sale results in income which is effectively 
connected with a trade or business in the 
United States. 
‘‘(C) RELATED
PERSONS.—Persons shall 
be treated as related to each other if such per-
sons would be treated as a single employer 
under the regulations prescribed under section 
52(b). 
‘‘(2) APPLICABLE PERCENTAGE.—For purposes 
of subsection (a)(2), the applicable percentage is— 
‘‘(A) in the case of an eligible article con-
sisting of qualified cotton that— 
‘‘(i) was only subject to processing in 
the United States, or 
‘‘(ii) in addition to any processing 
that may have occurred within the United 
States, was subject to additional processing 
only in a country or countries with which 
the United States has entered into a free 
trade agreement or for which the United 
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States has extended benefits through a 
unilateral preference program, 24 percent, 
and 
‘‘(B) in the case of an eligible article con-
sisting of qualified cotton that was subject to 
additional processing at any stage of its proc-
essing in a country with which the United 
States has not entered into a free trade agree-
ment or for which the United States has not ex-
tended benefits through a unilateral preference 
program, 18 percent. 
‘‘(3) APPLICABLE
COTTON
MARKET
PRICE.— 
For purposes of this section, the term ‘applicable 
cotton market price’ means, with respect to any eli-
gible article, the average market price for qualified 
cotton in a recognized international market (as de-
termined by the Secretary, in consultation with the 
Secretary of Agriculture) for the 3-calendar year pe-
riod ending with or within the taxable year imme-
diately preceding the taxable year in which the eligi-
ble article is sold. 
‘‘(c) OTHER DEFINITIONS.—For purposes of this 
section— 
‘‘(1) ELIGIBLE ARTICLE.— 
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‘‘(A) IN GENERAL.—The term ‘eligible ar-
ticle’ means any product which— 
‘‘(i) is comprised in whole or in part 
of qualified cotton which is certified, under 
such regulations established by the Sec-
retary in consultation with the Secretary of 
Agriculture, as meeting the requirements 
of paragraph (2)(B)(ii), 
‘‘(ii) is in its final condition, and 
‘‘(iii) is ready for retail sale to a con-
sumer. 
‘‘(B) EXCEPTION.—Such term shall not in-
clude any product if— 
‘‘(i) any component of such product is 
an eligible article for which a credit has 
been allowed, or 
‘‘(ii) the taxpayer selling such product 
has been notified by the person from whom 
such a component was acquired that such 
person intended to claim such credit. 
‘‘(C) FINAL CONDITION.— 
‘‘(i) IN
GENERAL.—For purposes of 
subparagraph (A)(ii), the term ‘final condi-
tion’ means, with respect to any article, 
the physical state in which such article is 
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presented for sale or sold for immediate re-
sale to a consumer, determined— 
‘‘(I) without regard to any de 
minimis augmentation that could be 
performed on it by or on behalf of a 
retailer of the eligible article, and 
‘‘(II) without regard to pack-
aging. 
‘‘(ii) DE MINIMIS AUGMENTATION.— 
For purposes of clause (i)(I), the term ‘de 
minimis augmentation’ means any graphics 
or other adornment imposed on or at-
tached to the article. 
‘‘(2) QUALIFIED COTTON.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
cotton’ means extra long staple cotton (as de-
fined in section 1111 of the Agricultural Act of 
2014) or upland cotton (within the meaning of 
section 1207(c) of such Act) which— 
‘‘(i) is grown in the United States, 
and 
‘‘(ii) meets the proof of origin require-
ments of subparagraph (B). 
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‘‘(B) PROOF OF ORIGIN REQUIREMENTS.— 
Cotton meets the proof of origin requirements 
of this subparagraph if— 
‘‘(i) such cotton was— 
‘‘(I) assigned a permanent bale 
identification number, or 
‘‘(II) meets such other require-
ments as the Secretary, in consulta-
tion with the Secretary of Agriculture, 
determines is sufficient to prove that 
the cotton originated in the United 
States, and 
‘‘(ii) the movement and volume of 
such cotton is digitally traced, under such 
regulations established by the Secretary in 
consultation with the Secretary of Agri-
culture, through the supply chain from its 
United States origin through to the last 
stage of processing into an eligible article. 
‘‘(C) PERMANENT
BALE
IDENTIFICATION 
NUMBER.—The term ‘permanent bale identi-
fication number’ means the autogenerated iden-
tification number assigned by the Secretary of 
Agriculture to a bale of qualified cotton that 
was grown and ginned in the United States. 
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‘‘(3) FREE TRADE AGREEMENT.— 
‘‘(A) IN GENERAL.—Except as provided by 
subparagraph (B), the term ‘free trade agree-
ment’ means a comprehensive bilateral or re-
gional agreement— 
‘‘(i) that covers substantially all trade 
between the parties to the agreement, and 
‘‘(ii) with respect to which an imple-
menting bill (as defined in section 151 of 
the Trade Act of 1974 (19 U.S.C. 2191)) 
is enacted into law. 
‘‘(B) EXCLUSIONS.—The term ‘free trade 
agreement’ does not include— 
‘‘(i) the WTO Agreement, as defined 
in section 2 of the Uruguay Round Agree-
ments Act (19 U.S.C. 3501), 
‘‘(ii) the agreements specified in 
101(d) of that Act (19 U.S.C. 3511(d)), or 
‘‘(iii) any other multilateral agreement 
of the World Trade Organization or any 
successor entity. 
‘‘(4) UNILATERAL PREFERENCE PROGRAM.— 
‘‘(A) IN GENERAL.—Except as provided by 
subparagraph (B), the term ‘unilateral pref-
erence program’— 
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‘‘(i) means a program of the United 
States that provides preferential duty 
treatment to textile or apparel articles im-
ported from a foreign country that is des-
ignated as a beneficiary of the program, 
and 
‘‘(ii) includes— 
‘‘(I) the African Growth and Op-
portunity Act (19 U.S.C. 3701 et 
seq.) and section 506A of the Trade 
Act of 1974 (19 U.S.C. 2466a), 
‘‘(II) the Caribbean Basin Eco-
nomic Recovery Act (19 U.S.C. 2701 
et seq.), 
‘‘(III) section 915 of the Trade 
Facilitation and Trade Enforcement 
Act of 2015 (19 U.S.C. 4454), and 
‘‘(IV) any other provision of 
law— 
‘‘(aa) establishing a program 
that provides preferential duty 
treatment to textile or apparel 
articles imported from a foreign 
country that is designated as a 
beneficiary of the program, and 
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‘‘(bb) that is enacted after 
the date of the enactment of this 
section. 
‘‘(B) EXCLUSION.—The term ‘unilateral 
preference program’ does not include the Gen-
eralized System of Preferences under title V of 
the Trade Act of 1974 (19 U.S.C. 2461 et 
seq.). 
‘‘(5) PROCESSING.— 
‘‘(A) IN GENERAL.—The term ‘processing’ 
means any physical process, or any stage in 
such process, that contributes to the conversion 
of an item comprised in whole or in part of 
qualified cotton into an eligible article. 
‘‘(B) EXCEPTION.—Such term shall not in-
clude the mere physical possession, storage, 
movement, or packaging of cotton or any eligi-
ble article. 
‘‘(6) UNITED
STATES.—The term ‘United 
States’ includes any possessions of the United 
States. 
‘‘(7) VOLUME.—The term ‘volume’ means, with 
respect to any eligible article, the amount of quali-
fied cotton in such article, as measured in pounds. 
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‘‘(d) INCREASED CREDIT FOR QUALIFIED COTTON 
YARN AND QUALIFIED COTTON FABRIC.— 
‘‘(1) QUALIFIED COTTON YARN.— 
‘‘(A) IN GENERAL.—At the election of the 
taxpayer, in the case of any eligible article 
which is composed in whole or in part of quali-
fied cotton yarn— 
‘‘(i) this section shall be applied sepa-
rately with respect to such cotton yarn, 
and 
‘‘(ii) the amount determined under 
subsection (a) with respect to such cotton 
yarn shall be equal to such amount (deter-
mined without regard to this subsection) 
multiplied by 1.6. 
‘‘(B) QUALIFIED COTTON YARN.—For pur-
poses of this subsection, the term ‘qualified cot-
ton yarn’ means a strand of fiber made in the 
United States from qualified cotton into a form 
suitable for weaving, knitting, braiding, felting, 
webbing, or otherwise fabricating into a fabric. 
‘‘(2) QUALIFIED COTTON FABRIC.— 
‘‘(A) IN GENERAL.—At the election of the 
taxpayer, in the case of any eligible article 
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which is composed in whole or in part of quali-
fied cotton fabric— 
‘‘(i) this section shall be applied sepa-
rately with respect to such cotton fabric, 
and 
‘‘(ii) the amount determined under 
subsection (a) with respect to such cotton 
fabric shall be equal to such amount (de-
termined without regard to this subsection) 
multiplied by 6.5. 
‘‘(B) QUALIFIED
COTTON
FABRIC.—For 
purposes of this subsection, the term ‘qualified 
cotton fabric’ means any material woven, knit-
ted, felted, or otherwise produced in the United 
States from, or in combination with, any fiber, 
yarn, or substitute thereof that was made in the 
United States from qualified cotton. 
‘‘(3) ELECTION.—An election under this sub-
section shall be made at such time and in such form 
as the Secretary may be regulations provide. 
‘‘(e) REGULATIONS.—The Secretary shall prescribe 
such regulations and other guidance as may be necessary 
or appropriate to carry out this section, including regula-
tions or guidance— 
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