ALABAMA (WHNT) — Alabama is one of just three states that taxes groceries at the state’s normal sales tax rate. However, lawmakers are looking to change that.
For years, there have been talks among state leaders to address the state’s grocery tax and now efforts are underway as lawmakers are looking to introduce a grocery tax reduction bill.
The grocery tax reduction bill would decrease the current sales tax from 4% to 2% over the course of the next few years.
It would cut the tax in half-cent intervals with the first half-cent cut going into effect on Sept. 1. The next cut would take place on November 1, 2024. Then cuts would be rolled out annually until the rate is 2 percent.
Senior policy analyst Carol Gundlach with Alabama Arise said the tax break would be significant for low-income individuals struggling to make ends meet.
“It would be a fairly significant tax break because those are the people who spend more of their available income on groceries,” Gundlach said.
However, the grocery tax cut would not be immediate.
“I wish I could tell people that when they go to the grocery store next week, their grocery bill is going to be smaller,” she said.
Leigh Helveston, a mother of three, said the small decline over the next couple of years isn’t a huge help.
“Several families are struggling to feed their kids or to feed their family, and a half of a percent really is not going to do anything to help anyone,” Helveston said.
Shirley Schofield with the North Alabama Food Bank said she’s seen the effects of inflation and the high cost of food that families are dealing with.
“We have definitely been seeing an increase in the number of people who are seeking food assistance. A lot of our community is really struggling there, having to come in for food assistance for the first time ever,” Schofield said.
The state grocery tax generates nearly half a billion dollars annually in funding for Alabama’s education trust fund. As the grocery tax phases down, lawmakers would have to replace the revenue with funding from somewhere else.