Grocery tax phase-out bill filed in House

(Freepik, YHN)

Rep. Danny Garrett (R-Trussville) filed a bill Wednesday that raises the prospect of lawmakers bringing an end to Alabama’s tax on groceries. 

HB250 would initiate the state to “begin phasing-out” the tax from its 4% to 3%, effective Sept. 1, before continuing an annual 1% drop until the tax reaches 0% in 2025. 

Garrett’s bill joins other proposals initiating an end to the grocery tax. Sen. Arthur Orr (R-Decatur) and Rep. Chris England (D-Tuscaloosa) have also filed bills. 

Lt. Gov Will Ainsworth has popularized the topic to bring finality to a tax that some say should’ve been eliminated long ago. 

 “The economy’s doing well, our budgets are doing well, we’ve seen nine years of growth, we’re going to continue to have more growth, so I think with that it’s time to cut taxes,” Ainsworth said. 

The tax, which generates approximately $600 million for the state’s Education Trust Fund, is not being looked at lightly by lawmakers. However, Alabama’s budgets are experiencing record surplus and growth, while trust fund revenue streams have climbed steadily in recent years. 

Senate President Pro Tem Greg Reed called the growing, bipartisan consensus for an end to the grocery tax this session “organic”. 

“I think only because of the surpluses are reasons that we have an opportunity to talk about it,” Reed said. Is there a way that even though we have the lowest tax burden already, are there ways that we can modify some of the taxes on food? I just think that’s an organic conversation.”

Alabama is one of three states to tax groceries at the full state sales tax rate of 4%. With county and municipal sales taxes included, grocery bills can carry up to 11% in taxes. 

Grayson Everett is a staff writer for Yellowhammer News. Follow him on Twitter @Grayson270 for coverage of the 2023 Legislative Session.

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