Sales Tax Cut on Food in Alabama
As of September 1st, House Bill 386 is now in effect, reducing Alabama’s sales tax on food from 3% to 2%. This new law also gives counties and local governments the option to lower local grocery taxes. State Assemblyman Danny Garrett, a Republican from Trussville, introduced the bill, which was signed by Governor Kay Ivey in May, marking the second tax cut in Alabama this year.
In response, a nonprofit organization focusing on poverty in Alabama has made its stance clear. Executive Director Robin Heiden expressed gratitude for the tax reduction while advocating for the total removal of the state’s grocery tax.
“This is fantastic news for the people of Alabama. The recent cuts in grocery taxes make it easier for everyone to manage their budgets, particularly during these times of high food prices,” Heiden remarked.
She further emphasized that the tax cuts represent a crucial initial move towards achieving tax fairness in Alabama. “The drop to 2% this year helps maintain momentum,” she added. “HB 386 is an essential step in correcting the state’s tax structure, which often places a heavier tax burden on those with lower and moderate incomes compared to the wealthiest households.”
Heiden also extended her thanks to lawmakers for their role in passing HB 386 during the 2025 legislative session.
“We appreciate Rep. Danny Garrett, Sen. Andrew Jones, and Arthur Oh for navigating HB 386 through Congress, and Governor Kay Ivey for endorsing it. The unanimous support we saw in Congress for this bill is truly commendable,” she noted.
While celebrating the passage of HB 386 as a win for working families, Heiden didn’t shy away from reiterating the goal to abolish the grocery tax completely.
“The grocery tax is a harsh burden for many families struggling with poverty. Our push to eliminate it entirely must continue,” Heiden stressed. “People across Alabama have long been standing up against this unfair tax, and we won’t stop until it’s gone.”
She did recognize that the grocery tax contributes significantly to the state’s Education Trust Fund, but still encouraged lawmakers to explore other sources of revenue to alleviate the financial strain on lower and middle-income residents.
“It’s worth noting that only 10 states still impose this burden on groceries, and we need to remove Alabama from that list. It’s crucial, though, that we ensure eliminating the grocery tax doesn’t negatively affect education funding in the long term,” Heiden remarked. “History shows that economic prosperity is not everlasting. Lawmakers need to craft sustainable tax policies thoughtfully.”
Heiden mentioned that Arise, the organization she leads, is considering several options to enhance revenue. “We’re committed to working with the state’s research committee on grocery taxation to find a constructive path forward,” she concluded. “We’ll continue advocating for proposals that could replace grocery tax income by adjusting existing state income tax credits.”
Although future legislation to completely or further reduce the grocery tax could be on the table in the next session, no specific proposals have surfaced yet.
