Will We See a Cotton Production Credit
The "Buying American Cotton Act" has been introduced
Senators from cotton producing states has introduced the “Buying American Cotton Act”.
This Act would provide a transferrable credit for cotton produced in the US and then likely processed and sold in the US.
The credit would be equal to the qualifying volume of cotton sold times an applicable percentage times the applicable cotton market price.
The applicable percentage would be based on processing of the cotton in the US plus 24% of any additional processing done by other countries where we have a free trade agreement.
The applicable cotton price would be the average market price for the three-year period before the current year.
It appears that this credit would be available to the first sale of the cotton product such as a company that manufactures cotton dress shirts would receive the credit.
The taxpayer would be able to sell the credit to others, therefore, providing value even if they do not have sufficient tax liability to soak up the credit.
Will this be enough of an incentive to bring production back to the US. We will keep you posted.