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No repeat of last year’s grocery tax cut in Alabama – here’s why
Idaho

No repeat of last year’s grocery tax cut in Alabama – here’s why

Since her husband’s death, Diane Huey and her mother have been eating out quite often, but they still eat at home from time to time. So today at a grocery store in Midtown Mobile…

“I looked in the deli section and chicken is $4.99 a pound,” she says. “The price has gone up.”

Christian Williams has also noticed that food prices have risen sharply.

“I am a mother of four children. And I have to try to shop as cheaply as possible.”

But Christian still wants to give them the nutrients they need.

Last year, these shoppers and thousands of others in Alabama benefited from a new law that reduced the state sales tax on Alabama groceries from four percent to three percent.

Actually, it was supposed to happen again this year and start in September.

But now there is this statement from the Alabama Department of Revenue informing Alabama shoppers that “Alabama’s sales tax on groceries will remain at three percent on September 1, 2024. If the state education fund grows sufficiently in the next fiscal year, the state tax rate will be reduced on September 1, 2025.”

It seems to be a small setback.

“So, I wouldn’t call it a setback. I would call it a pause,” says Carol Gunlach, a senior policy analyst at Alabama Arise.

Alabama Arise is a nonprofit advocacy organization focused on serving Alabama residents marginalized by poverty.

They were instrumental in getting lawmakers to pass the law that initiated the federal food tax cut last year.

“The food tax cut bill called for a 3.5 percent increase in the education budget to allow for further cuts,” says Carol. “This year we have a revenue increase for education of just over one and a half percent. So we are below that standard.”

In Alabama, education is funded through income taxes and state sales taxes.

Carol said the group’s next step will be to encourage lawmakers to find other sources to supplement the education budget and reach the threshold at which the grocery tax can be reduced again – until it is repealed.

“And you know,” she says, “there are a number of ways to replace that revenue, still reduce the food tax, and still protect our public schools.”

Food prices appear to be stabilizing, but both shoppers say a tax on our food is not fair to Alabama families.

“No,” says Christian. “Because everything is so high now.”

And Diane? “I’m just doing my best. I’m just going to go ahead and get it. I have to eat.”

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