Food manufacturers and processors that buy a high share of their ingredients from U.S. farms would receive a federal tax credit worth up to 25% of their domestic agricultural input costs, capped at $100 million per company per year. To qualify, a company's three-year average of domestic sourcing must meet a rising threshold — starting at 50% in 2026 and climbing to 85% by 2034. Agricultural cooperatives (farmer-owned buying and selling groups) can pass portions of the credit through to their farmer members. The bill covers commodities such as grains, oilseeds, cotton, sugar, and farm-raised fish that are used to make products sold directly for human consumption.
Corporate Benefits
- Tax credit for large food manufacturers — up to $100M per company annually for sourcing U.S. agricultural commodities, with no revenue cap on the eligible company
- Eligibility for companies with low domestic sourcing — credit zeroes out if 3-year domestic input share falls below the rising annual threshold (50%–85%)
Average Household Impact
- Domestic agricultural supply chain incentives — raises cost of using imported ingredients for U.S. food producers, which may affect retail food prices
Congressional Summary
Grown in America Act of 2025This bill establishes a new tax credit (as part of the general business tax credit) for domestically produced agriculture.Specifically, the bill allows a tax credit for the lesser of (1) 25% of domestically produced agricultural commodity expenses multiplied by the ratio of such expenses to total agricultural commodity expenses (excluding expenses for agricultural commodities that cannot feasibly be produced domestically), or (1) $100 million. (Conditions apply).To qualify for the tax credit, a business’s average expenses (over three years) for domestically produced agricultural commodities must exceed a certain percentage of total agricultural commodity expenses (excluding expenses for agricultural commodities that cannot feasibly be produced domestically). The required percentage is 50% for 2026 and increases by 5% each year until it reaches 85% for tax years beginning after 2033.Under the bill, agricultural commodities includehorticultural, viticultural, and dairy products;livestock and livestock products (excluding live animals);poultry and bee raising products; andfarm-raised fish products.In addition, the general business tax credit limit based on a business’s tax liability is calculated separately for the domestically produced agriculture tax credit, and the credit is generally limited to 50% of a business’s net regular tax liability.Finally, domestically produced agriculture tax credit amounts in excess of such limitation may be carried forward for 10 years (rather than the 20 years allowed for other business tax credits).
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Introduced in House
- Action Date
- 2025-02-27
- Date Added
- 2026-05-05
- Source
- Congress.gov →
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