Montgomery, AL – Starting September 1, Alabama families will see relief at the checkout counter as the state sales tax on groceries drops from 3% to 2%. Officials estimate the reduction could save a family of four around $125 per year, offering much-needed financial relief amid rising food prices.
Ellie Taylor, president of the Alabama Grocers Association, said the change is significant for lower-income households:
“The grocery tax is a regressive tax that affects those who can afford it the least, the most.”
Impact on State Budget
While families welcome the change, lawmakers acknowledged the financial trade-offs. Sen. Arthur Orr (R-Decatur) noted the cut could reduce the state’s education budget by roughly $120 million. Still, he emphasized that the benefits outweigh the drawbacks:
“It’s something we thought we could manage. Particularly in light of the expiration of the overtime tax, which is now being covered by the federal government.”
Relief on Baby and Feminine Products
Families will also see savings beyond groceries. Beginning Monday, the state’s 4% sales tax on diapers, maternity clothes, and feminine hygiene products will be eliminated.
Rep. Neil Rafferty (D-Birmingham) said the change will help households in meaningful ways: “We’re bound to know somebody, love somebody or have in the future—be in that situation where these pennies will go an extra mile for these families.”
Local Governments Can Join In
Sen. Orr pointed out that cities and counties can also choose to reduce or eliminate their local sales taxes on groceries, offering further relief to residents. “Those will help taxpayers across the state as they, maybe encounter increased prices at grocery stores,” he said as per CBS42 News.
Long-Term Goal: Eliminate the Grocery Tax Entirely
Lawmakers say the ultimate objective is to fully remove the grocery tax in Alabama. However, Orr cautioned that it will take time: “Costs are going up in state government, and we have to avoid a bad fiscal situation.”
Broader Context: Inflation and Household Budgets
With grocery prices continuing to rise nationwide, even a 1% reduction in taxes can make a difference for families struggling with everyday expenses. Advocates argue that eliminating the grocery tax entirely would not only ease financial pressure but also improve food security across the state.
Do you think Alabama should completely eliminate the grocery tax? Share your views in the comments.
