The Alabama Legislature gave final approval Tuesday to legislation taking another penny off the state’s sales tax on groceries.
Assuming House Bill 386 is signed by Gov. Kay Ivey, the reduction to a 2% tax on most food items will take effect Sept. 1.
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The bill’s passage was part of a rapid-fire day in the State House where other tax cut and incentive bills were passed. There are two days remaining in the 2025 legislative session.
“We’ve reduced the grocery tax now 50%,” bill sponsor Rep. Danny Garrett, R-Trussville, told reporters after the bill’s passage. “We’re still one of the few states that taxes groceries. We’re headed, I think, toward zero tax on groceries.”
In 2023, the Legislature passed a bill reducing the state sales tax on food from 4% to 3%. An additional one percentage point reduction to the grocery tax is possible if the Education Trust Fund grows by at least 3.5% in a year. That hasn’t yet happened, but HB386 allows the one percentage point reduction.
The bill is expected to save Alabamians about $122 million annually, money that otherwise would have gone to the state’s Education Trust Fund.
EDITOR’S NOTE — This story was written by Mary Sell and originally published by Alabama Daily News.
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