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All 35 members of the Alabama Senate are co-sponsoring a bill that would reduce the tax rate on groceries in the state.
SB257, sponsored by Sen. Andrew Jones, R-, would phase the tax rate on groceries down from 4 percent to 2 percent over the next three years beginning Sept. 1, 2023. On Sept. 1 the tax would move down to 3.5 percent and continue to phase down by one-half percent on Nov. 1, 2024, before ending at two percent on Nov. 1, 2023.
The tax reduction, however, is contingent upon revenue sources to the Education Trust Fund growing by two percent each year. The bill also defines “food” under the qualifications of the Supplemental Nutrition Assistance Program (SNAP) which has a broad set of options.
According to SNAP guidelines, “food” that would qualify for tax reductions include fruits and vegetables; meat, poultry, and fish; dairy products; breads and cereals; snack foods and non-alcoholic beverages; seeds and plants, which produce food for the household to eat.
Items that would not qualify for the tax reduction include Beer, wine, liquor, cigarettes, or tobacco; vitamins, medicines, and supplements; live animals would not qualify except shellfish, fish removed from water, and animals slaughtered prior to pick-up from the store; foods that are hot at the point of sale; and any nonfood items.
Alabama is one of 13 states in the country that still impose taxes on groceries. There have been multiple attempts to pass legislation that would cut the tax rate during recent legislative sessions that never passed. Due to the massive bipartisan support of SB257 there is more optimism it passes to the House.
HB250, sponsored by Danny Garrett, is a House bill that would also reduce the grocery tax but differs from the Senate bill. In Garrett’s bill, the grocery tax would be reduced to zero over the course of seven years. And it would only apply to foods under the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) which has fewer eligible items than SNAP.
Sen. Mericka Coleman has a bill that would remove the four percent tax rate on food and the individual income tax deduction for federal income taxes paid. The bill would be proposed as an amendment to the Constitution of Alabama.
