The Alabama Republican Party (ALGOP) is working closely with State Senate leadership to expand a tax cut package that will cut the state’s grocery tax again, while also including additional relief for Alabama businesses, according to ALGOP chairman John Wahl.
The package of bills is a key part of the ALGOP’s legislative agenda this year. The bills passed the Alabama House of Representatives last month, and the party is now working with the State Senate to ensure the legislation moves forward this week.
“Our focus has always been on delivering real, lasting tax relief for the people of Alabama — families, seniors, and job creators alike,” said Wahl. “One of our top priorities is cutting the grocery tax and making sure every single person in Alabama gets some help making ends meet. It’s time to let people keep more of their own money. By working with Senate leadership to include pro-business tax cuts in this package, Alabama Republicans are also making sure our state continues to be a place where businesses can grow, invest, and create good-paying jobs. I am thankful for the vision of the State Senate in adding these important cuts for our citizens and job creators.”
The main focus of the package is cutting the state grocery tax and building on a 2023 reduction of 1%. This legislation seeks to lower the grocery tax by an additional 1% from the current 3%, helping families save on essential purchases. This move will save Alabama families an estimated $123 million each year on groceries alone. The $200 million tax cut package also includes increasing the exemption to the state’s income tax on retirement plan withdrawals, reductions in taxes on businesses, and increasing the optional standard income tax deduction range.
“With the inclusion of business tax cuts, the package represents a comprehensive approach to economic strength and fiscal responsibility, as well as providing immediate tax relief to the people of Alabama. These bills will continue the Republican Party’s record of lowering taxes in Alabama,” Wahl said. “Since 2021, Republican leadership in the State Legislature has successfully passed approximately $1.4 billion in tax cuts, but our work isn’t done yet. I believe we must continue putting Alabama taxpayers first and ensure that our families, citizens, and businesses get to keep more of their own hard-earned money. Now is the time to put people first again.”
The package of bills could pass the State Senate as early as this week, according to ALGOP. Republicans appear content to let an overtime pay tax exemption die in June, as legislation by House Minority Leader Anthony Daniels (D-Huntsville) to make the exemption permanent hasn’t advanced in the 2025 session. The state’s sales tax on groceries was already scheduled to be reduced by one cent once certain state revenue growth projections were met.
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