H.R. 1707

119th CONGRESS 1st Session

To amend the Internal Revenue Code of 1986 to establish a tax credit to incentivize the purchase of American agricultural commodities.

IN THE HOUSE OF REPRESENTATIVES · February 27, 2025 · Sponsor: Mr. Kustoff · Committee: Committee on Ways and Means

Table of contents

• H.R. 1707
  • Sec. 45BB. Domestically produced agriculture credit.

Sec. 45BB. Domestically produced agriculture credit.

• (a) In general
  • For purposes of section 38, the domestically produced agriculture credit determined under this section for any taxable year is an amount equal to the lesser of—
  • (1)
    • the product of—
    • 25 percent of the total agricultural input costs of such taxpayer with respect to such taxable year, multiplied by
    • the applicable percentage of the taxpayer for the taxable year, or
    • $100,000,000.
• (b) Definitions
  • For purposes of this section—
    • For purposes of this section, the applicable percentage for a taxpayer for any taxable year is an amount (expressed as a percentage) equal to the quotient of—
    • The term domestic agricultural input costs means any expenses paid or incurred by the taxpayer during any taxable year to purchase agricultural commodities—
    • The term foreign agricultural input costs means any expenses paid or incurred by the taxpayer during any taxable year to purchase agricultural commodities—
• (c) Ineligibility for credit
  • (1) In general
    • In the case of any taxpayer for which the 3-year average applicable percentage for any taxable year does not exceed the applicable threshold, the amount of the credit allowed under subsection (a) shall be reduced to zero for such taxable year.
  • (2) Applicable threshold
    • For purposes of this subsection, the term means— applicable threshold
      • in the case of taxable years beginning in 2026, 50 percent,
      • in the case of taxable years beginning in 2027, 55 percent,
      • in the case of taxable years beginning in 2028, 60 percent,
      • in the case of taxable years beginning in 2029, 65 percent,
      • in the case of taxable years beginning in 2030, 70 percent.
      • in the case of taxable years beginning in 2031, 75 percent,
      • in the case of taxable years beginning in 2032, 80 percent, and
      • in the case of taxable years beginning after December 31, 2033, 85 percent.
  • (3) 3-year average applicable percentage
    • For purposes of this subsection, the term means, with respect to a taxpayer and any taxable year, the amount (expressed as a percentage) equal that is equal to the quotient of— 3-year average applicable percentage
      • the domestic agricultural input costs of such taxpayer for the 3-year period ending on the last day of such taxable year, divided by
      • the total agricultural input costs of such taxpayer for such 3-year period.
• (d) Cooperative organizations
  • (1) Apportionment of credit
    • In the case of an eligible cooperative organization described in paragraph (4), any portion of the credit determined under subsection (a) for the taxable year may, at the election of the organization, be apportioned among patrons eligible to share in patronage dividends on the basis of the quantity or value of business done with or for such patrons for the taxable year.
  • (2) Form and effect of election
    • An election under subparagraph (A) for any taxable year shall be made on a timely filed return for such year.
  • (3) Election irrevocable
    • An election under subparagraph (A) shall be irrevocable for the taxable year.
  • (4) Treatment of organizations and patrons
    • (A) Organizations
      • The amount of the credit not apportioned to patrons pursuant to paragraph (1) shall be included in the amount determined under subsection (a) for the taxable year of the eligible cooperative organization.
    • (B) Patrons
      • The amount of the credit apportioned to patrons pursuant to paragraph (1) shall be included in the amount determined under subsection (a) for the first taxable year of each patron ending on or after the last day of the payment period (as defined in section 1382(d)) for the taxable year of the eligible cooperative organization or, if earlier, for the taxable year of each patron ending on or after the date on which the patron receives notice from such cooperative of the apportionment.
  • (5) Special rule
    • If the amount of the credit of an eligible cooperative organization determined under subsection (a) for a taxable year is less than the amount of such credit shown on the return of the cooperative organization for such year, an amount equal to the excess of—
      • such reduction, over
      • the amount not apportioned to such patrons under subparagraph (A) for the taxable year,
    • shall be treated as an increase in tax imposed by this chapter on such organization. Such increase shall not be treated as a tax imposed by this chapter for purposes of determining the amount of any credit under this chapter.
  • (6) Eligible cooperative organization
    • For purposes of this subsection, the term has the meaning given to the term in section 199A(g)(4). eligible cooperative organization specified agricultural or horticultural cooperative
• (e) Aggregation rule
  • All persons which are treated as a single employer under subsections (a) and (b) of section 52 shall be treated as a single taxpayer for purposes of this section.
• (f) Regulations
  • The Secretary may prescribe such regulations and other guidance as may be necessary or appropriate to carry out this section.