Alabamians get a break on their grocery tax — see how it impacts you

A new law reducing Alabama’s grocery tax goes into effect today.

The current 4 percent Alabama grocery tax will decrease to 3 percent.

Grocery tax saving

What is the impact? For every $100 you purchase on food (eligible items below) the grocery tax goes from $4 to $3.

The new law received bi-partisan support and was supported by anti-poverty groups and business interests such as Alabama Arise and the Alabama Grocers Association.

According to the Grocers Association, before the new law’s implementation on September 1st, Alabama was one of three states in the nation that did not partially or fully reduce their grocery tax. 

The group hopes this year’s 1% reduction will lead to a full repeal. 

“The 1% reduction of the state’s 4% grocery tax on September 1 will enable the state to calculate the actual cost for removal of the full grocery tax and help Alabama move forward with its elimination. The AGA has advocated for the removal of our state’s grocery tax for over a decade.” 

Ellie Taylor, President/CEO, Alabama Grocers Association

Potential grocery tax reduction in 2024

Presently, the  grocery tax in Alabama goes directly into the State’s Education Trust Fund. The new law does allow the grocery tax to drop another 1 percent in September 2024 if the education trust fund grows by at least 3.5 percent.

What items are reduced?  Here is the list:

• Fruits and vegetables
• Meat, poultry, and fish
• Dairy products
• Breads and cereals
• Snacks
• Non-alcoholic beverages
• Seeds and plants, which produce food for the household to eat.

As part of this legislation, the state’s food definition is tied to the Supplemental Nutrition Assistance Program (SNAP), which covers all edible foods except alcohol, tobacco, and hot prepared foods.

What are your thoughts about the new grocery tax law? Let us know on social media by tagging us at @thebamabuzz