Businesses that manufacture or sell products containing cotton would be most directly affected, particularly those in the textile and apparel industries. Companies that choose to source cotton grown in the United States and can demonstrate its origin and track its processing would be eligible for this new tax credit, potentially reducing their tax burden. This could also indirectly affect cotton farmers in the U.S. by increasing demand for their product.

Consumers might also be indirectly affected if the increased use of U.S. cotton leads to changes in product availability or pricing, although the direct impact on consumers is not specified. Businesses that currently rely heavily on non-U.S. cotton or cannot implement the required tracing system might face a competitive disadvantage compared to those who can qualify for the credit.