State Senator Andrew Jones files bill to eliminate grocery tax that aims to be revenue-neutral
A state senator from East Alabama has filed a bill that would amend Alabama’s Constitution to eliminate the state sales tax on groceries.
Jones says that a cap on the federal income tax deduction (FIT) for Alabama state income tax filers would provide an equal amount of money to what is currently generated by the grocery sales tax.
“The grocery tax is a regressive tax which penalizes hardworking families in Alabama,” said Senator Jones. “At least 38 states and the District of Columbia have full or partial sales tax exemptions for groceries. It is important to me that we eliminate this out-dated tax which disproportionately affects lower income Alabamians.”
The grocery tax in Alabama has long been a source of frustration for politicians on both sides of the aisle, but the funds it provides to the state’s education budget have made legislators wary of changing it for fear of being perceived as cutting funds for education. Many efforts to do away with the tax have failed in recent years.
Jones maintains his bill would “not result in a loss to our education budget,” and added that “blue-collar Alabamians will not only get to avoid paying taxes on groceries, they will also not pay a dime more in income taxes.”
As put by the personal finance website thebalance.com, the current Alabama tax code “allows a deduction for your total federal tax liability from your federal return, less any federal tax credits you claimed. So if you owe the IRS $4,000 and you claimed one tax credit in the amount of $1,000 on your federal return, you can claim a $3,000 deduction on your state return.”
Jones’ bill would cap the amount Alabamians could deduct. Individuals would be able to deduct up to $6,000, while married couples filing jointly could deduct up to $12,000.
Jones explained that “a family of 4 making under $134,800 would still be able to take their full FIT deduction. An individual filing as head of family making less than $70,700 would still be able to take their full FIT deduction.”
The amount wealthier Alabamians would be made to pay under the new system is being presented as an amount equal to what is currently generated by the sales tax on groceries.
Three-fifths of both chambers in the Alabama legislature must approve constitutional amendments, which are then put before the Alabama voters for a popular vote.