MONTGOMERY, Ala. (WIAT) — Starting Friday, groceries statewide will be 1% cheaper. That’s because the legislature this year passed a bill reducing the state’s 4% food tax to 3% this September.
The legislation passed unanimously in the 2023 legislative session. Rep. Penni McClammy says lawmakers finally listened to citizens.
“For me, it was a no-brainer. We’re taxing something that we need to live,” McClammy (D- Montgomery) said.
After the first percent decrease Friday, another percent drop is set for next September, contingent on 3.5% revenue growth to the Education Budget. If that growth doesn’t happen, the percentage will come off in the following year the budget does grow by 3.5%.
Rep. McClammy thinks it’s likely the second percent will come off next year.
“Right now, the way things are growing with the budget, it does seem like we should have enough money.”
McClammy says the ultimate goal is to get rid of the 4% tax entirely. So does Sen. Andrew Jones, who sponsored the Senate version of the bill.
Both McClammy and Jones are chairing a task force to figure out how to do that. Beginning this November, the group will meet quarterly to monitor the tax cut’s impact on revenue and make recommendations to the legislature.
“My goal is to get us to a place where we have no state sales tax on groceries in Alabama,” Jones (R- Centre) said.
Jones says this is the largest tax cut in Alabama’s history. He says once the full 2% comes off, it amounts to about $304 million.
“It’s a big day for working Alabamians who are just trying to put food on the table,” Jones said.
Using data from the USDA, those with Alabama Arise estimate the 1-cent reduction could save a family of four about $150 a year.
The state tax cut does not affect local grocery taxes, which vary across the state. You can find your local grocery tax rate on the Alabama Department of Revenue’s website.