Alabama shoppers will see two major sales tax changes at the register starting today.
The state’s sales tax on groceries drops from 3% to 2%, and a new three-year exemption removes the 4% state sales tax from a list of baby, maternity and menstrual products.
Under the grocery change, the 2% rate applies to “food” as defined by the federal SNAP program, excluding alcohol, tobacco and hot prepared foods.
A cut to the sales tax on groceries was first passed by the Alabama Legislature in 2023.
Lt. Governor Will Ainsworth led the charge and garnered unanimous support behind State Sen. Andrew Jones (R-Centre) and State Rep. Danny Garrett’s (R-Trussville) measure to implement a gradual reduction, tied to a 3.5% year-over-year increase in Education Trust Fund revenues.
At that time, it stood as the largest tax cut in Alabama history.
In 2025, lawmakers accelerated that reduction by an additional 1% — resulting in an estimated $123 million in annual savings.
Combined with previous cuts, the total savings from the grocery tax reduction will reach approximately $246 million annually.
Local city and county sales taxes are unchanged unless a local government votes to reduce them, which is now possible under the law.
Another tax cut begins today, covering baby formula, diapers, wipes, bottles, breast pumps and pumping equipment, maternity clothing and menstrual hygiene products.
A tax cut on this category of items was proposed in recent years by State Sen. Arthur Orr (R-Decatur), and was finally accomplished in 2025 with support from both the Alabama House and Senate, as well as Governor Kay Ivey.
Taken together, today’s changes cap a run of tax relief passed by lawmakers this quadrennium.
Alabama also created a mileage income-tax credit for volunteer first responders beginning in 2024, finished phasing out the minimum state business privilege tax for small filers starting with the 2024 tax year, temporarily cut state taxes on overtime work, and provided one-time income-tax rebates $300 for working families.
“Another $135 million in tax cuts are now in effect,” Speaker of the House Nathaniel Ledbetter (R-Rainsville) celebrated today.
“Our fiscally conservative approach to government has led to over $1.5 billion in tax cuts and Alabama being consistently recognized as one of the lowest taxed states in America.”
Grayson Everett is the editor in chief of Yellowhammer News. You can follow him on X @Grayson270.
