Alabama lawmakers push to speed up grocery tax cut

BIRMINGHAM, Ala. (WBRC) – Alabama lawmakers are working to accelerate a tax cut on groceries, potentially giving shoppers relief sooner than expected.

House Bill 386, introduced this session, would move up the timeline for an additional 25% reduction in the state’s grocery sales tax, setting it to take effect Sept. 1.

Several years ago, the legislature approved a plan to cut the state’s 4% grocery tax in half.

The first 25% reduction took effect in 2023, with the second 25% set to kick in once state revenue grew by 3.5%. However, that growth is not expected this year, prompting lawmakers to take action.

Rep. Danny Garrett (R-Trussville), a supporter of the bill, said the tax cut is a necessary step to help Alabama families.

“We have been consistently cutting taxes for the past several years,” Garrett said. “We felt it was important to implement that additional 25% in grocery tax reduction because everyone is experiencing high prices at the grocery store.”

Another bill, introduced alongside HB 386, would allow local governments to reduce their portion of the grocery sales tax without meeting a revenue growth requirement.

Currently, cities and counties can only cut their grocery tax if their revenue grows by at least 2%—a restriction that has prevented many local governments from making reductions.

The change would give local officials more flexibility, though it could impact funding for public schools.

Most local grocery sales tax revenue supports the Education Trust Fund.

Lawmakers say Alabama’s budgeting process has built up enough reserves to move forward with the tax cut now.

Carol Gundlach, a senior policy analyst with Alabama Arise, said while the move is helpful, advocates ultimately want to see the grocery tax eliminated.

“We want to completely get rid of the grocery tax, which would give everyone the equivalent of two extra weeks of groceries,” Gundlach said. “But we don’t want to do that in a way that hurts our schools because that’s where sales tax revenue goes. It’s a delicate balance, but in these inflationary times, this will make a big difference for families.”

HB 386 has already passed a House committee and now heads to the full House for a vote.

If approved, it will move to the Senate, where it must pass through committee before reaching a final vote.

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