Alabama House of Representatives Passes Bill to Lower State Sales Tax on Food

A bill to cut Alabama’s food sales tax neared passage tonight and won approval in the Alabama House of Representatives.

HB479, by Republican Trussville Rep. Danny Garrett, will cut taxes from 4% to 3% on Sept. 1 of this year. On September 1, 2025, taxes will drop to 2% for him.

Once fully implemented, the tax is expected to save Alabama taxpayers about $300 million annually. The bill passed by a vote of 103 to 0. The bill will move to the Senate, where strong support is expected. All 35 senators have signed on as sponsors or cosponsors of a similar bill.

For decades, lawmakers have introduced bills to lower the food tax, but they have never passed. One reason was that sales tax revenues were donated to an education trust fund that supports public schools.

If the forecast for ETF returns in fiscal 2025 is less than 2%, the cut to 2% in 2025 will be delayed. Garrett said he doesn’t expect school funding to take a hit.

“This is a tax cut that we are confident will continue without impacting the Education Trust Fund,” Garrett said.

Aid groups, including Alabama Allies, have argued for decades that Alabama’s food tax is hurting low-income families struggling to pay for housing and other necessities like medicine. Alabama is one of just three states that don’t apply reduced tax rates on food.

More recently, inflation has helped fuel support for a food tax cut in Alabama. Food prices rose 7.7% from April 2022 to April 2023, according to the U.S. Bureau of Labor Statistics.

HB479 provides that the tax relief applies to eligible foods under the Supplemental Nutrition Assistance Act (SNAP), formerly known as food stamps.

The bill does not reduce excise taxes on food collected by cities and counties. The law prohibits cities and counties from raising sales taxes on food beyond the level at which the law took effect. Some representatives said they did not want to take away the power of local governments to control their own tax rates.

“I don’t think that’s where we are,” said Rep. Ron Bolton (R-Northport). “I think it’s a place where voters do that to get them out.”

But the House rejected Mr. Bolton’s amendment that would give cities and counties some flexibility in raising food taxes.

After the bill passed, several Democrats called for caution to former state legislators who had made unsuccessful calls to repeal the food sales tax. Birmingham Democrat MP Juandarin Givan has proposed naming the bill after former Montgomery MP John Knight, a longtime proponent of the food tax abolition bill.

read more: How Grocery Tax Cuts Help Alabama’s Aging Rural Population

After 31 years, why is Alabama Republican momentum to lower the grocery tax?

‘No food tax’: Rising food prices may cause Alabama to refocus on food tax

Low-income advocates urge Alabama to stop collecting sales tax on groceries

This story will be updated.

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