Praise be to Allah.
No zakaah is due on cotton, because it is not something that can be measured, so it comes under the same ruling as vegetables on which no zakaah is due.
Ibn Qudaamah (may Allaah have mercy on him) said in al-Mughni (2/296): There is no zakaah on flowers such as saffron, safflower and cotton, because they are not like grains or crops, and they are not measurable, so no zakaah is due on them, like vegetables. Ahmad said: Nothing is due on cotton.
It says in Fataawa al-Lajnah al-Daa’imah li’l-Ifta: No zakaah is due on cotton plants according to the correct scholarly opinion. This is the view of the majority of scholars on this matter, because the basic principle is that zakaah is not due, and there is no evidence to the contrary in sharee’ah. End quote.
Fataawa al-Lajnah al-Daa’imah li’l-Ifta (9/240).
Shaykh Ibn ‘Uthaymeen (may Allaah have mercy on him) was asked in Fatawa Noor ‘ala al-Darb: Is zakaah due on cotton? Because we have heard that zakaah is due only on grains and crops.
He (may Allaah have mercy on him) replied: Zakaah is due only on grains and crops. As for other vegetables, cotton and watermelon etc., no zakaah is due on them, but if one prepares them for trade after harvesting them, then they become trade goods. End quote.
And Allaah knows best.