Grown in America Act of 2025

Bill Number

H.R. 1707

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Taxation

Status

Introduced

Latest Action

2025-02-27: Referred to the House Committee on Ways and Means.

Last Updated

2026-06-30T08:06:28Z

AI-Generated Summary

Purpose of the Legislation

The Grown in America Act of 2025 aims to encourage businesses to buy agricultural products grown in the United States by creating a new tax credit. This credit rewards companies for using domestic farm goods in products made and sold in the U.S. for human consumption, with the goal of supporting American farmers and reducing reliance on foreign imports.

Key Provisions

• New Tax Credit (Section 45BB of the Internal Revenue Code): Eligible businesses can claim a credit equal to the lesser of:
• 25% of their total costs for buying agricultural inputs (raw farm materials), multiplied by the "applicable percentage" (the share of those costs that are for U.S.-produced goods), or
• $100 million per year.
• Definitions:
• Agricultural commodity: Includes specific farm products like grains, oilseeds, fruits, vegetables, and farm-raised fish (as listed in existing farm laws), but only if used for human food or in making food products.
• Domestic agricultural input costs: Expenses for buying U.S.-grown commodities used to make products in the U.S. sold for eating without further changes.
• Foreign agricultural input costs: Similar expenses, but for non-U.S.-grown commodities.
• Total agricultural input costs: Sum of domestic and foreign costs, excluding any commodities the Secretary of Agriculture lists as impossible to produce in the U.S. that year (e.g., due to climate or feasibility).
• Ineligibility Thresholds: No credit if the business's three-year average use of domestic inputs falls below rising minimums: 50% starting in 2026, increasing by 5% yearly to 85% after 2033.
• Cooperatives: Farm cooperatives can pass the credit to their member patrons (e.g., farmers) based on business volume, with rules for reporting and adjustments if credits change.
• Aggregation Rule: Related companies (treated as one employer under tax law) are considered a single taxpayer to prevent splitting for higher credits.
• Administration: The IRS can issue rules to implement the credit. The Secretary of Agriculture must maintain an annual list of commodities unavailable domestically.
• Integration with Existing Credits: The credit becomes part of the general business credit, with special rules like a 50% carryback period (up to 10 years) instead of the usual 20, and adjusted limits to prioritize it over other credits.
• Effective Date: Applies to tax years starting after December 31, 2025.

Significant Changes to Existing Law

• Adds a entirely new section (45BB) to the Internal Revenue Code for this credit, which did not exist before.
• Modifies the general business credit rules (Section 38) by adding this as the 42nd type of credit and creating special limitations (e.g., treating minimum tax as zero and altering carryover periods) to make it more accessible than some other business credits.
• Introduces a new role for the Secretary of Agriculture in tax matters by requiring an annual list of unavailable domestic commodities, linking farm policy directly to tax incentives.

Potential Impacts

• On Government Agencies: The IRS will handle credit claims, increasing administrative workload and potential audits for input cost verification. The Department of Agriculture will need resources to update the unavailable commodities list yearly, affecting budgeting and coordination between agencies.
• On Citizens and Businesses: Food manufacturers and processors may shift to U.S. suppliers for tax savings, potentially creating jobs in farming but raising production costs if domestic goods are pricier than imports—this could lead to higher food prices for consumers. Small businesses might benefit more due to the $100 million cap per taxpayer.
• On International Relations: Could reduce U.S. imports of agricultural goods, straining trade with exporting countries (e.g., Canada or Mexico for certain crops), possibly prompting retaliatory tariffs or disputes under trade agreements like USMCA.
• Broader Economy: Boosts domestic agriculture by increasing demand for U.S. products, but the rising thresholds might pressure businesses to source more locally over time, affecting global supply chains.

Main Stakeholders Affected

• U.S. Farmers and Agricultural Producers: Primary beneficiaries through higher demand for their goods.
• Food Processing and Manufacturing Businesses: Eligible claimants if they buy and use farm inputs; must track domestic vs. foreign purchases to qualify.
• Agricultural Cooperatives: Can distribute credits to members, aiding smaller farmers.
• Importers and Foreign Suppliers: Potentially harmed by reduced U.S. purchases of their products.
• Consumers: Indirectly affected via possible changes in food availability and prices.
• Government Entities: IRS (tax enforcement), Department of Agriculture (commodity listing), and Treasury (overall revenue impact).

Notable Legal, Constitutional, or Political Implications

• Legal: Relies on Congress's power to impose taxes and provide incentives (under Article I of the Constitution), but may face challenges if businesses argue the definitions or thresholds are unclear or discriminatory. The cooperative apportionment mirrors existing farm tax rules, ensuring consistency.
• Constitutional: No major issues anticipated, as it uses standard tax credit mechanisms without infringing on free trade or due process, though the escalating thresholds could be seen as gradually coercive.
• Political: Supports rural economies and "Buy American" policies, appealing to agricultural states, but could divide opinions on trade protectionism vs. free markets. Estimated revenue loss (from credits) might spark debates on federal spending priorities, especially if paired with farm bill reforms.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Kustoff, David [R-TN-8]

Cosponsors (35)

Rep. Costa, Jim [D-CA-21], Rep. Alford, Mark [R-MO-4], Rep. Rouzer, David [R-NC-7], Rep. Carey, Mike [R-OH-15], Rep. Hinson, Ashley [R-IA-2], Rep. Newhouse, Dan [R-WA-4], Rep. Cline, Ben [R-VA-6], Rep. Pfluger, August [R-TX-11], Rep. LaHood, Darin [R-IL-16], Rep. Finstad, Brad [R-MN-1], Rep. Gray, Adam [D-CA-13], Rep. Vindman, Eugene Simon [D-VA-7], Rep. Jackson, Ronny [R-TX-13], Rep. Babin, Brian [R-TX-36], Rep. Stefanik, Elise M. [R-NY-21], Rep. Langworthy, Nicholas A. [R-NY-23], Rep. Stauber, Pete [R-MN-8], Rep. Womack, Steve [R-AR-3], Rep. Gonzalez, Vicente [D-TX-34], Rep. Cuellar, Henry [D-TX-28], Rep. Lawler, Michael [R-NY-17], Rep. Jack, Brian [R-GA-3], Rep. Valadao, David G. [R-CA-22], Rep. Allen, Rick W. [R-GA-12], Rep. Fong, Vince [R-CA-20], Rep. Goldman, Craig A. [R-TX-12], Rep. Correa, J. Luis [D-CA-46], Rep. Schweikert, David [R-AZ-1], Rep. Riley, Josh [D-NY-19], Rep. Wagner, Ann [R-MO-2], Rep. Thompson, Glenn [R-PA-15], Rep. Davis, Donald G. [D-NC-1], Rep. Ryan, Patrick [D-NY-18], Rep. Miller, Max L. [R-OH-7], Rep. Crawford, Eric A. "Rick" [R-AR-1]

Recent Actions

• 2025-02-27: Referred to the House Committee on Ways and Means.
• 2025-02-27: Introduced in House
• 2025-02-27: Introduced in House

Bill Versions

• Grown in America Act of 2025 — issued 2025-02-27 — PDF (11 pages)