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Alabama Arise backs Coleman, McClammy bills to untax groceries

The bill would replace lost revenue to the Education Trust Fund by eliminating a deduction for federal income tax.

Merika Coleman is joined by supporters of Alabama Arise Tuesday on the statehouse steps to announce a bill eliminating Alabama's tax on groceries and the state's federal income tax deduction. (Jacob Holmes/APR)
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Sen. Merika Coleman, D-Birmingham, said untaxing groceries started as a partisan issue when she was serving in the Alabama House of Representatives.

But the time is now to finally eliminate the tax on groceries, she said, as the philosophy has suddenly gained bipartisan support among Alabama lawmakers.

“We’re here today because Alabama is one of only three states, along with Mississippi and South Dakota, with no tax breaks on groceries, and that’s a shame,” Coleman told a throng of supporters and media gathered at the Statehouse steps on Tuesday. “The average Alabama family of four spends approximately $600 a year in grocery tax. The state’s 4 percent grocery tax is enough to pay for an additional two weeks worth of food every single year.”

Coleman’s bill would phase out the Federal Income Tax (FIT) deduction to replace the potential $600 million that would be lost in revenue to the Education Trust Fund if the grocery tax is eliminated.

“We have more equitable and fair ways to fund our education budget than taking food away from families who are struggling to pinch every penny and keep food on the table,” Coleman said. 

Coleman said the FIT deduction costs the ETF an estimated $900 million a year.

Robin Hyden, executive director of Alabama Arise, said that families making between $150,000 to $200,000 a year would start to see the elimination fo the FIT deduction costing them more than the savings on grocery taxes. That income bracket is in the top 10 percent of Alabama families. 

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“It should give you a fit, because it’s an unfair tax break that disproportionately lowers taxes for the wealthiest people,” Coleman said of the FIT deduction. 

Coleman’s bill would require a constitutional amendment to remove the FIT deduction.

“I say we should let everyday Alabamians decide whether they prefer a tax loophole that mostly benefits the richest few, or if they want a grocery tax cut that benefits everyone,” Coleman said. 

With bipartisan support, there are other bills in the works to untaxed groceries, and Coleman said she just wants some form of grocery tax elimination to cross the finish line. But she bristled at legislation that would not immediately replace lost revenue in the ETF and a proposal floating in Republican circles that would only lift the tax on “healthy foods.”

Penni McClammy, D-Montgomery, also announced that she will be bringing her own bill to untax groceries but didn’t have full details at the time of the press conference. McClammy said she expects to file the bill sometime next week.

Jacob Holmes is a reporter at the Alabama Political Reporter. You can reach him at [email protected]

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