The Alabama Senate voted 34-0 Tuesday for HB 386 by Rep. Danny Garrett, R-Trussville, a bill that will reduce the state sales tax on groceries from 3% to 2% beginning on Sept. 1 and give cities and counties more flexibility to reduce local grocery taxes if they choose. The Alabama House quickly concurred in the Senate’s changes, meaning the bill now will go to Gov. Kay Ivey.
Alabama Arise executive director Robyn Hyden released the following statement Tuesday in response:
“Reducing the grocery tax will make it easier for every Alabamian to make ends meet, especially in this time of persistently high food prices. Alabama Arise is thrilled to see the widespread, bipartisan support for reducing the state sales tax on groceries. And we urge Gov. Kay Ivey to sign this bill into law quickly.
“The state grocery tax reduction from 4% to 3% in 2023 was an essential first step toward tax justice in Alabama, and this year’s bill continues that momentum. The grocery tax drives many families deeper into poverty, and Arise remains committed to the goal of eliminating it entirely.
“Arise members from every corner of our state have advocated relentlessly for decades for Alabama to untax groceries. Our work will continue until the state grocery tax is in the dustbin of history where it belongs.
“Arise appreciates Rep. Danny Garrett and Sens. Arthur Orr and Andrew Jones for guiding HB 386 through the Legislature. We’re thankful for the unanimous legislative support on this bill this year. And we’re grateful for former Rep. John Knight, former Sen. Hank Sanders, Reps. Laura Hall, Penni McClammy and Mary Moore, and so many other legislators whose determined work over so many years laid the groundwork for this progress.
What should happen next
“Reducing the grocery tax benefits every Alabamian. And it is an important step toward righting the wrongs of our state’s upside-down tax system, which forces Alabamians with low and moderate incomes to pay a higher share of their incomes in state and local taxes than the wealthiest households.
“It is important to ensure grocery tax elimination doesn’t harm our children’s education in the long term. Education Trust Fund revenues are strong enough for now to reduce the grocery tax without causing severe harm to school funding. But history tells us that times of strong revenues don’t last forever. Lawmakers must work together to agree to a solution to untax groceries sustainably and responsibly.
“Arise is open to numerous ideas for replacement revenue, and we will continue working with the state’s Joint Study Commission on Grocery Taxation to find a path forward. We continue to support our longstanding proposal to replace grocery tax revenue by capping or ending the state income tax deduction for federal income tax payments. Alabama is the only state to allow this full deduction, which overwhelmingly benefits the wealthiest households. Closing this skewed loophole would protect funding for public schools and ensure Alabama can afford to end the state sales tax on groceries forever.”
