The Alabama House of Representatives has taken a significant step toward enacting a bill that aims to lower the state’s sales tax on food. The legislation, known as HB479 and introduced by Rep. Danny Garrett, R-Trussville, received approval from the House. If passed into law, the bill would decrease the current 4% tax rate to 3% starting on September 1 of this year. Furthermore, on September 1, 2025, the tax rate would further decrease to 2%.
Once fully implemented, this tax reduction is projected to save Alabama taxpayers approximately $300 million annually. The bill achieved unanimous support in the House, with a vote of 103-0. It will now proceed to the Senate, where strong support is expected, given that all 35 senators have endorsed similar legislation as sponsors or co-sponsors.
Efforts to reduce the grocery tax have been introduced by lawmakers over the years, but none have successfully passed due, in part, to the fact that the sales tax revenue is allocated to the Education Trust Fund for supporting public schools.
However, the reduction to 2% in 2025 would be postponed if the anticipated revenue growth for the Education Trust Fund in fiscal year 2025 falls below 2%. Rep. Garrett expressed confidence that school funding would not be adversely affected by this tax cut.
For decades, advocacy groups such as Alabama Arise have emphasized that Alabama’s tax on food disproportionately affects low-income families, who already struggle to cover other essential expenses like housing and medicine. Notably, Alabama is one of only three states that do not offer a reduced tax rate on food.
Recent inflation rates have further bolstered support for reducing Alabama’s food tax. According to the U.S. Bureau of Labor Statistics, the price of food increased by 7.7% from April 2022 to April 2023.
HB479 specifically outlines that the tax reduction will apply to food items eligible under the Supplemental Nutrition Assistance Act (SNAP), previously known as food stamps.
However, the bill does not lower the sales taxes on food imposed by cities and counties. It does, however, prohibit local governments from raising their sales tax on food above the level in effect when the law comes into effect. Some representatives voiced concerns about limiting the authority of local governments to determine their own tax rates.
After the bill’s passage, several Democratic lawmakers acknowledged former state representatives who had advocated for repealing the sales tax on food in the past, albeit unsuccessfully. Rep. Juandalynn Givan, D-Birmingham, suggested naming the bill after former Rep. John Knight of Montgomery, who had long supported legislation to eliminate the food tax.