Alabama shoppers could see the state’s grocery tax vanish from their receipts in 2027, but that doesn’t mean groceries will suddenly get cheaper everywhere. State lawmakers are drafting legislation to wipe out the remaining 2% state sales tax on food, yet city and county grocery taxes would stay firmly in place in most of the state’s 465 municipalities and 67 counties.
GOP Leaders Call Repeal a Day-One Priority
Alabama has already trimmed its state grocery tax twice, cutting it from 4% to 3% in September 2023 and from 3% to 2% in September 2025, according to alreporter.com. Alabama legislative leaders have now announced a plan to eliminate that last 2% entirely, and the outlet reports that fully killing the state grocery tax will be a “day-one priority” of the 2027 Legislative Session. House Speaker Nathaniel Ledbetter said lawmakers have already drafted the legislation and will file it immediately once the session begins.
As AL.com reports, eliminating the remaining state grocery tax would cost the state more than $240 million annually, according to legislative fiscal estimates — a figure not far off from the roughly $270 million estimate reported separately by Alabama Reflector. Alabama Arise, the advocacy group pushing for the repeal, hopes lawmakers finish the job in 2027. Spokesman Chris Sanders has framed the fight in blunt moral terms, previously telling reporters that ending the grocery tax “is a human issue, a moral issue, everybody has to eat to survive.” Justin Bogie has said reducing the state’s 2% grocery tax would benefit Alabama families.
Why the Checkout Price Might Not Change
Here’s the catch: local governments run their own, entirely separate grocery tax systems, and the state can’t touch them. Alabama is a Dillon’s Rule state, meaning cities and counties only have the authority the state legislature explicitly grants them, which sharply limits local home rule. State Rep. Danny Garrett has said Alabama’s cities and counties cannot restore state grocery tax cuts by simply adding that tax back onto their own books, and per AL.com’s reporting, local governments are barred from raising grocery taxes to replace revenue lost from state-level cuts.
That leaves mayors in a bind, because Garrett has also said Alabama local governments are heavily dependent on sales taxes and that cities and counties cannot raise property taxes under state law to make up the difference. A statewide poll found that 66.2% of respondents named groceries and food as a top household cost pressure, well ahead of the 39.4% who pointed to gas prices — underscoring why the politics of grocery taxes keep rising to the top of the Statehouse agenda even as the fix stays incomplete for shoppers.
Foley and Fairhope Say Cuts Would Hurt
In Foley, the math is already tight. The city’s combined sales tax rate runs 10% — 4% state, 3% county and 3% city — though Foley’s food purchases carry a lower combined rate than other taxable goods because of the 2% state grocery tax layered in. Mayor Ralph Hellmich has said cutting Foley’s grocery sales tax would devastate the city’s ability to provide services amid rapid growth, and he’s estimated that property taxes would need to be tripled to replace the lost revenue. Foley has no authority to assess income taxes, leaving sales tax as one of its few levers…