Rep. Greg Murphy (R-NC) introduced bipartisan legislation on Jan. 22 aimed at strengthening the market for American-grown cotton by creating a domestic cotton consumption tax credit.
H.R. 7230, the Buying American Cotton Act of 2026, would amend the Internal Revenue Code to establish a tax credit that encourages companies to use cotton originating in the United States. The bill has been referred to the House Committee on Ways and Means. It garnered 23 original cosponsors, including U.S. Rep. Terri Sewell (D-AL).
The legislation would provide a tax credit to the first U.S. seller of an eligible cotton product sold directly to consumers, with the credit calculated based on factors such as verification of U.S. cotton origin, the amount of U.S.-grown cotton used, and the location of manufacturing.
Rep. Murphy said global competition has put domestic cotton growers at risk, strained rural communities, and destabilized the broader agricultural supply chain.
“American cotton growers, especially those in Eastern North Carolina, play a critical role in our nation’s farm economy,” the congressman stated. “They help supply countless industries with high-quality raw material to produce clothing, home goods, industrial and medical products, and much more.”
Farmers in North Carolina’s 3rd Congressional District produced over 113,000 bales of cotton in 2024, according to Rep. Murphy’s office.
“America’s cotton producers are facing the combined pressures of low commodity prices and high input costs,” said Patrick Johnson, chairman of the National Cotton Council, the industry’s largest advocacy group. “By leveraging the traceability of U.S. cotton and rewarding retailers who choose products made in whole or in part with U.S. cotton, the Buying American Cotton Act will help strengthen demand for our crop, support investment in U.S. textile manufacturing, and enhance the resilience of our supply chains.”