HUNTSVILLE, AL. (WHNT) — Some Alabama lawmakers are again trying to eliminate the state sales tax on groceries.
In Alabama, shoppers pay a minimum of four percent grocery tax put into effect by the state in 1939. The tax affects items shoppers buy at grocery stores across the state.
Alabama is one of just three states to tax groceries at the state’s normal sales tax rate. The other two are Mississippi and South Dakota. The state’s 4% sales tax on groceries generates nearly $500 million every year which goes to the education trust fund budget.
House Minority Leader Anthony Daniels said he believes the money lost for the fund from the tax could be made up in other areas.
“You’re saving money on necessity items like groceries, you’re still spending that excess money in other areas, you’re spending on clothing, you’re spending it on other areas that you need,” he said. “The necessities or things you deem as a necessity that also feeds the education trust fund.”
Daniels said other ways of collecting the money need to be explored.
“There are a lot of unknowns that we haven’t factored in so to say that you’re losing this amount of money, half a billion dollars, because of eliminating the tax or groceries, however there will be a way to supplement that and to really generate revenue from other sources,” Daniels said.
This is not the first effort to eliminate grocery tax in Alabama. It’s been brought to the floor of the state legislature multiple times. This year some lawmakers are hoping to actually push it through and a local shopper said its the relief they need
“It would be a lot better because a lot of people, the way the foods gone up and everything, the struggling families,” Local Brent Smith said. “They really need a break and you gotta eat and you don’t have to go out to eat but you gotta eat at home and they get it from the grocery store. If they can just save that the bigger families the tougher times are it will really help people out,”
Daniels said his vision to do away with grocery tax will also help local agriculture.
“I think it’ll give us an opportunity to engage more local farmers in getting their products to market in local communities,” he said. “I think it will create the competition that we need in order to drive the cost down long term. I think it may encourage some of our farmers and folks to get into the agriculture business to become producers and local farmers that can be competitive from a price standpoint.”
One other possibility if the bill passes is grocery stores could increase the prices to make up for the tax loss or municipalities may raise their individual tax. Daniels says he plans to make sure the state strikes a balance and monitor that possibility if the bill is passed. The legislature will reconvene March 7th.