“A bill to amend the Internal Revenue Code of 1986 to establish a domestic cotton consumption credit.”
No CRS summary available for this bill.
This section establishes a new general business tax credit under new IRC §45BB for the documented volume of qualified U.S.-grown cotton (i.e., extra long staple cotton as defined in section 1111 of the Agricultural Act of 2014 or upland cotton as defined in section 1207(c) of such Act) in an eligible article (i.e., a product in final condition ready for retail sale to a consumer, certified as containing such digitally traced cotton from U.S. origin) sold by the taxpayer in a qualifying sale (i.e., first sale to an unrelated person, excluding certain foreign sales). The credit equals such volume multiplied by (1) the applicable percentage—24% if the cotton was processed only in the U.S. or in the U.S. plus countries with U.S. free trade agreements (i.e., comprehensive bilateral or regional trade agreements enacted via an implementing bill under section 151 of the Trade Act of 1974 (19 U.S.C. 2191)) or unilateral preference programs, or 18% otherwise—and (2) the applicable cotton market price (i.e., three-calendar-year average price in a recognized international market, as determined by Treasury in consultation with USDA). (This credit incentivizes U.S. cotton consumption and requires supply chain traceability via permanent bale identification numbers or equivalent proof of origin.)