Grocery shopping will get a little cheaper across Alabama after a state-level tax cut took effect Monday. Newsweek has compared the states that tax groceries.
The change does not alter any city or county grocery taxes and is expected to save Alabamians about $121.9 million.
Why It Matters
A grocery tax is a sales tax applied to food purchased for home preparation and consumption. While prepared foods—such as hot deli items and restaurant takeout—are typically taxed at the full rate, many states either exempt staple groceries (bread, produce and other essentials) or tax them at a lower rate because food is considered a necessity.
What To Know
A law approved by the legislature and signed by Governor Kay Ivey has reduced the state sales tax on food from 3 percent down to 2 percent. The lowered rate is a continuation of incremental reductions: until September 2023, the state taxed groceries at the full 4 percent state sales tax—it was reduced to 3 percent last year.
“This is great news for the people of Alabama,” said Robyn Hyden, executive director of Alabama Arise, a civil rights advocacy organization. “The latest grocery tax reduction—the second in three years—will make it easier for every Alabamian to make ends meet, especially in this time of persistently high food prices.”…