September 1 marks a significant day for Alabama shoppers as a new state law reduces the sales tax on groceries and suspends it entirely on a range of essential baby and feminine care products.
During the 2025 legislative session, lawmakers approved lowering the state sales tax on food from 3% to 2% when they passed HB 386. The change is expected to save consumers across the state approximately $122 million each year. However, the new law does not affect local sales tax rates on groceries. Cities and counties now have the option to reduce or eliminate their own grocery sales tax without the previously required condition of a 2% revenue growth over the prior year.
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Also beginning Sept. 1, a wide range of infant and female hygiene items will be exempt from state sales tax through August 31, 2028. HB 152 exempts products such as diapers, baby wipes, baby bottles, breastfeeding supplies, maternity clothing, and menstrual hygiene products.
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The tax suspension will last for three years, after which state leaders are expected to assess its impact on the Education Trust Fund.
Sherri Blevins is a staff writer for Yellowhammer News. You may contact her at [email protected].
