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The Buying American Cotton Act of 2025 establishes a federal tax credit for businesses that sell products made from U.S.-grown cotton. The credit is calculated based on the volume of qualified cotton in the product and an applicable percentage (24% for cotton processed only in the U.S. or in free-trade-agreement countries, 18% for cotton processed elsewhere), multiplied by the average market price of cotton. The bill includes enhanced credit multipliers for products containing U.S.-made cotton yarn (1.6x) or fabric (6.5x), and requires digital tracing of cotton through the supply chain to verify U.S. origin.
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