WASHINGTON, D.C. — U.S. Senator Cindy Hyde-Smith (R-Miss.) introduced legislation June 5 to allow consumers to claim a tax credit for purchasing solid American hardwood products for their homes.

The Solid American Hardwood Tax Credit Act, companion legislation to a House bill introduced in May, would allow individual taxpayers to include American-manufactured solid 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, comprised of 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.

Despite the significance of the forestry sector to Mississippi’s economy, the state’s hardwood industry has been affected by a severe 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.  Much of this decline is associated with foreign substitutes that often 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.  

The bill 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.).  The National Hardwood Lumber Association supports the legislation.