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Are Alabama Grocery Taxes adding Insult to Injury as Prices Continue to Soar?

An Alabama-based family of four that spends around $10,000 in groceries this year – will be shelling out roughly an extra thousand bucks in taxes; food prices are roughly 11% higher than they were just a year ago – across the board.  Here in Alabama, where 15% of residents reportedly live in poverty, renewed efforts are underway to tackle the state’s 4% sales tax on groceries which critics say “affects low-to-moderate income households the worst”.

Groups such as “Alabama Arise” and the Alabama Policy Institute want to completely eliminate the sales tax on groceries.  Other organizations, like the “Tax Foundation” – believe Alabama and other states with the sales tax on grocery items should consider offering income tax rebates.

For Alabama the issue is nothing new, as the state has been wrestling with the idea of eliminating the sales tax on grocery purchases for many years.  It seems the problem lies with the state finding a way to eliminate that tax, without causing lasting harm to public schools.  That state sales tax on groceries generates an estimated $500 million annually and Alabama is one of only three states in the nation (Mississippi and South Dakota being the others) that assesses a full sales tax on groceries, without offering a tax credit or rebate for low-income households.  Prices at the stores are clearly soaring.  In May of this year, prices for meats, poultry, fish, and eggs jumped up 14.3% – according to Bureau of Labor Statistics.  It was the largest 12-month increase since May of 1979.

Alabama State Senator Andrew Jones, of Centre, has spoken at an Alabama Arise rally on repealing the state sales tax on groceries and last spring he sponsored a proposed constitutional amendment that would repeal the tax if approved by voters.  Various methods, alternatives and options are cuurently being discussed regarding a cut – or full elimination – of the tax.

We’ll have more on this story as it continues to develop.

(AL.COM/www.al.com)

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