New Senate proposal seeks to encourage use of sustainable American hardwood

WASHINGTON (VDN) — U.S. Sen. Cindy Hyde-Smith (R-Miss.) has introduced legislation to allow consumers to claim a tax credit for purchasing solid American hardwood products for their homes — a measure intended to shore up a hard-hit American industry made up of small sawmills and family-owned secondary manufacturers.

The Solid American Hardwood Tax Credit Act would allow individual taxpayers to include solid American-manufactured hardwood products as qualified home energy efficiency improvements under the Energy Efficient Home Improvement Credit. The credit would apply to flooring, paneling, millwork, cabinetry doors, cabinetry facing, windows or skylights 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.

“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,” she 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 home improvement energy efficiency tax credits under Section 25C of the code. It would also offset the cost of the bill by eliminating a 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. The bill would end this provision, which Hyde-Smith described as allowing the federal government “to pick winners and losers.”

The bill also aligns with a March executive order issued by former President Donald Trump, which called for the immediate expansion of American timber production and tasked the secretaries of the Interior and Agriculture departments to craft legislative proposals to improve timber production and forest management.

Hyde-Smith’s legislation is the Senate companion to a House bill (H.R. 3322) introduced by House Agriculture Committee Chairman Glenn “GT” Thompson (R-Pa.) and U.S. Rep. Terri Sewell (D-Ala.). The National Hardwood Lumber Association supports the legislation.