Alabama grocery tax holiday starts May 1

HUNTSVILLE, Ala. (WAFF) – Alabama’s new grocery tax holiday starts May 1 and runs through the end of June.

For the first time since sales tax was created in 1939, shoppers in the state will not pay state tax on groceries.

House Bill 527 became law in early April. For the next three years, Alabamians will get two months without the 2 percent grocery tax.

State representative Mike Shaw added the holiday to the bill that Huntsville representative James Lomax sponsored.

According to the USDA, the average family of four spends around $1,000 a month on groceries. Without the 2 percent tax, that family would save around $40 by the end of the two-month holiday.

“One thing I hear from my constituents all the time is, when are we going to get rid of the grocery tax?” Shaw said. “Because we’re doing it in an incremental way, every step doesn’t sound like a lot. But when you add the 2 percent, we’ve already cut and the 2 percent of the grocery tax holiday, it’s going to be a significant chunk of cash in people’s pockets over time.”

The grocery tax has already been slashed in half since 2023.

Shopper Kelli Taylor said any break helps.

“Last month I could fill my vehicle up for 60 bucks. Last week, it was 93 dollars, so everything’s going up,” Taylor said. “So, to me, any break is a welcomed break, and 2 percent is a lot more than 0 percent, so I’ll take it,” Taylor said.

Alabama is one of only eight states that still has a grocery tax. Shaw said lawmakers will keep pushing toward eliminating it entirely.

An important part is making sure the Education Trust Fund (ETF) can handle it, which has lost millions of dollars of grocery tax funding since the cuts.

The holiday only applies to the state tax. Local city and county sales taxes on food remain in effect.

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