MONTGOMERY — The Alabama House and Senate passed a joint resolution on Thursday forming a commission to study possible elimination of the state's sales tax on groceries.
Legislation cutting the state sales tax on groceries by 2% over the next two years if the state meets certain revenue projections passed the House on Thursday. It still needs to pass the Senate Education Budget Committee, the full Senate, and be signed into law by Gov. Kay Ivey.
"This is a companion of sorts. It's a study commission on the effect on the ETF of the grocery tax as we're looking in the future at doing more than the two cents," State Sen. Andrew Jones (R-Centre) said on Thursday.
House Joint Resolution 243 establishes the Joint Study Commission on Grocery Taxation to "study a proposed elimination of the sales and use tax on food items pursuant to state law and evaluate the impact of eliminating the sales and use tax on, but not limited to, the following:
Household expenditure by Alabama residents, with focus on those whose incomes are below the Federal Poverty Level and those whose incomes extend above the Federal Poverty Level to at least the median household income for the state.
The Education Trust Fund, both in isolation and in relation to the remainder of the state budget.
Revenue collection by political subdivisions.
Community food banks and nonprofit organizations that provide food.
Hunger and malnutrition, especially relating to children and the elderly."
The first meeting of the commission will be held no later than Dec. 1, 2023, according to the resolution. The commission will consist of lawmakers, a representative of the Alabama Grocers Association, a representative of the National Federation of Independent Businesses, and a representative of a nonprofit organization appointed by State Senate President Pro Tem Greg Reed (R-Jasper).
The commission's final report of its findings, conclusions, and recommendations for any proposed legislation to eliminate the state sales tax on groceries is due by Nov. 1, 2026.
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