Thanks to Alabama Act 2023-554 in the last legislative session, Alabama will start reducing the state’s portion of sales tax on food/groceries (“grocery tax”) on September 1, 2023 from 4% to 3%.  In September 2024, the state’s portion will go from 3% to 2%, assuming the ETF grows by more than 3.5%.

In total, that will cut the state’s share from 4 to 2% which is expected to save Alabama taxpayers over $300 million annually.

We should also note that the city and county sales and use tax rates on food will be equal to their general sales tax rate in effect as of June 15, 2023. Local governments can reduce their rate on food in 25% increments in any year when there is sufficient growth in their local General Fund.

Starting next month, Alabama consumers will see a reduction (NOT ELIMINATION) on SNAP eligible food items which generally includes any food or food product for home consumption, except alcoholic beverages, tobacco, hot foods, or hot food products ready for immediate consumption.

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