Alabama lawmakers voted to cut the state sales tax on food and to exempt diapers, baby formula and feminine hygiene products from the state sales tax altogether. The Alabama Senate approved both bills by votes of 34-0. The bills now goes to Governor Kay Ivey for her signature.
The food tax reduction comes as lawmakers in both parties said families are being hurt by soaring grocery prices. The reduction, if signed into law, will lower the state sales tax on food from 3% to 2% beginning Sept. 1. Lawmakers in 2023 reduced the tax from 4% to 3%. An additional reduction to 2% was planned but hinged on budget growth that did not materialize.
"We're still one of a few states that taxes groceries. We're headed toward zero taxes, we're headed in the right direction. This is big," Republican House Member Danny Garrett, the sponsor of the bill, said.
The reduction will cost the state about $121 million annually in tax revenue that would otherwise goes to the Education Trust Fund. The leader of Alabama Arise, an advocacy group that supports policies that help low-income families, said the grocery tax belongs in the "dustbin of history."
"The grocery tax drives many families deeper into poverty, and Arise remains committed to the goal of eliminating it entirely," Alabama Arise Executive Director Robyn Hyden said.
Lawmakers also approved a bill that will exempt baby formula, maternity clothing, diapers and menstrual hygiene products from state sales tax. Baby wipes, breast pumps and bottles would also be exempt. The exemption from the 4% sales tax will cost the state about $13 million annually.
"This is a big win for Alabama's working families," Democratic House Member Neil Rafferty, the sponsor of the bill, wrote on social media about the approval.
