US HB7230

Creates a new tax credit under Internal Revenue Code Section 45BB for domestic cotton consumption, calculated by multiplying the documented volume of qualified U.S.-grown cotton in eligible retail-ready products by the applicable percentage and the 3-year average international cotton market price

Sets the applicable credit percentage at 24% for cotton processed only in the U.S. or in countries with U.S. free trade agreements/unilateral preference programs, and 18% for cotton processed at any stage in non-FTA countries

Provides enhanced credit multipliers of 1.6x for qualified cotton yarn made in the U.S. and 6.5x for qualified cotton fabric produced domestically

Requires digital supply chain tracing from U.S. origin through final processing and certification via permanent bale identification numbers or equivalent proof of origin systems established by Treasury and USDA

Applies to eligible articles sold after enactment and allows the credit to be transferred under Section 6418; the credit is added to the general business credit under Section 38