Hardwood tax credit bill introduced
U.S. Senator Cindy Hyde-Smith (R-Miss.) has introduced legislation that would enable consumers to claim a tax credit for purchasing U.S. hardwood products for their homes.
The Solid American Hardwood Tax Credit Act (S.1964) would allow individual taxpayers to include U.S,-manufactured hardwood products as qualified home energy efficiency improvements under the Energy Efficient Home Improvement Credit. The credit would apply to any flooring, paneling, millwork, cabinetry doors, cabinetry facing, window, or skylight comprising deciduous trees grown and processed in the United States.
“Mississippi’s sawmills and rural communities that depend on timber have been hit hard by the same economic challenges facing the entire industry. This bill is designed to support the domestic hardwood industry and the jobs it provides while making American-made hardwood products more affordable for families,” Hyde-Smith said.
“Our goal with this legislation is to preserve rural manufacturing jobs and sawmill operations that are critical to local economies and national security supply chains, while encouraging the use of environmentally sustainable wood products over cheap, Chinese-made synthetic alternatives,” Hyde-Smith added.
Despite the significance of the forestry sector to Mississippi’s economy, the state’s hardwood industry has been affected by a national decline. The domestic hardwood-grade lumber market has fallen from 6.5 billion board feet to less than 2 billion board feet in the past 26 years, per the Senator, who believes much of the decline is associated with foreign substitutes that may contain harmful chemicals and larger carbon footprints than sustainably harvested American hardwoods.
The Solid American Hardwood Tax Credit Act would amend the Internal Revenue Code to qualify American hardwood products for the home improvement energy efficiency tax credits under Section 25c of the Internal Revenue Code while offsetting the cost of the bill by eliminating a costly bonus tax credit created in the Inflation Reduction Act (IRA). The IRA bonus credit provides increased subsidies for carbon capture projects only if union labor requirements are met. As such the bill would end a provision that allows the federal government to pick winners and losers, says Hyde-Smith.
Hyde-Smith says S.1964 also falls in line with a March executive order issued by President Trump, which called for the immediate expansion of American timber production and tasked the secretaries of Interior and Agriculture to craft legislative proposals to improve timber production and forest management.
Hyde-Smith’s legislation is the Senate companion bill to a House bill (HR.3322) introduced by House Agriculture Committee Chairman Glenn “GT” Thompson (R-Pa.) and U.S. Representative Terri Sewell (D-Ala.).
