State Sen. Andrew Jones, R-Centre, has introduced a proposed constitutional amendment to eliminate the state sales tax on groceries.
Jones’ bill, Senate Bill 144, is different from other recent efforts to eliminate the grocery tax in that his proposal would be revenue neutral and also neutral to the State Education Trust Fund. In other words, the State of Alabama and the Education Trust Fund would neither gain money nor lose money if SB144 passes.
“The grocery tax is a regressive tax which penalizes hardworking families in Alabama,” Jones said. “At least 38 states and the District of Columbia have full or partial sales tax exemptions for groceries. It is important to me that we eliminate this out-dated tax which disproportionately affects lower income Alabamians.”
Jones’ bill pays for the loss of sales tax revenue by capping the federal income tax deduction on Alabama state income taxes. Alabama is one of only 6 states that allow such a deduction.
“It was important to me to have a revenue-neutral proposal that did not result in a loss to our education budget,” Jones continued. “Grocery sales taxes fund our education budget, as does state income tax. By implementing an FIT deduction cap, funding for our education budget remains unchanged.”
Under Jones’ proposal, individuals would still be able to take a FIT deduction of up to $6000 and Married Couples filing jointly would still be able to deduct up to $12,000.
“In layman’s terms,” Jones continued, “a family of 4 making under $134,800 would still be able to take their full FIT deduction. An individual filing as head of family making less that $70,700 would still be able to take their full FIT deduction. Finally, a person filing as single or married filing separately making less than $58,300 would still be able to take their full FIT deduction.”
While everyone would benefit from no grocery tax, Jones noted that working families would benefit two-fold.
“Our blue-collar Alabamians will not only get to avoid paying taxes on groceries,” said Jones, “they will also not pay a dime more in income taxes. SB144 will result in more money staying in their pocketbooks. I encourage everyone who supports this effort to contact your local legislator and ask them to support SB144.”
Constitutional amendments require a 3/5ths vote of both the House and Senate and must then be approved by a majority of Alabama voters.