The Alabama state Legislature is set to hear a bill in the upcoming session that would help to reduce or end Alabama’s grocery tax.
This is not the first attempt to pass legislation that would eliminate or reduce the tax on groceries. None have been successful thus far.
The new bill, referred to as HB-15, states, “This bill would authorize the governing body of a municipality to reduce or eliminate its local sales and use tax on food.”
“The governing body of a municipality may at any time reduce or eliminate its local sales and use tax rate on food, provided that the proposal shall have been (1) proposed by the governing body after a public hearing on the issue; and (2) approved by resolution of the governing body.”
One of the major hurdles in passing HB-15 is the concern from lawmakers that the lack of a sales tax could deplete the state’s Education Trust Fund budget. Currently, the statewide sales tax of 4% brings in about $500 million annually for the fund.
However, one lawmaker believes there are ways to to regain the lost revenue.
“You’re saving money on necessity items like groceries, you’re spending on clothing, you’re spending it on other areas that you need,” said House Minority Leader Anthony Daniels (D-Huntsville). “The necessities or things you deem as a necessity, that also feeds the Education Trust Fund.”
Sen. Sam Givhan (R-Huntsville) addressed the concerns of harming the fund by cutting or eliminating the sales tax.
“The truth of the matter is we can’t give them enough money,” he said. “Never. It’s an insatiable desire, and that’s apparent in almost everything we do in government is always more money is the solution, and I think we could look at a number of things and say that’s not the case.”
Givhan has discussed the difficulty in getting legislation passed that would cut or eliminate the grocery tax.
“It’s like everything else, you’ve got to have a majority of the Legislature salute it and you’ve got to have the governor sign it,” he said. “Lots of things get discussed. That’s where it has to start.”
Alabama is one of three states that taxes groceries at the state’s normal sales tax. The others are Mississippi and South Dakota.
The new Alabama legislative session will begin March 7.
Austen Shipley is a staff writer for Yellowhammer News.