MONTGOMERY — Legislation that would cut the state's portion of the sales tax on groceries in half is expected to start in the House this week.
Legislation filed in the Senate in April would reduce the state sales tax on groceries from 4% to 2% over four years using the SNAP definition of food. The tax would be reduced by one-half percent per year as long as there is at least 2% growth in the Education Trust Fund (ETF) from the previous fiscal year. ETF revenue growth historically averages about 3.6% annually, according to the Public Affairs Research Council of Alabama. The plan would reduce state tax revenue in the ETF by $304 million once fully implemented.
House Speaker Nathaniel Ledbetter (R-Rainsville) told reporters on Thursday he'd like to see the tax dropped a full cent instead of a half-cent annually until the two-cent reduction is fully implemented.
When asked if grocery tax cut legislation would be considered in committee this week, Ledbetter said, "I think it will be."
"We'll see it move. We've got a ton of co-sponsors in the House. I don't know if we've got everybody," Ledbetter added. "One thing that I'd like to see us do and I think we're going to do it is we'll probably sub the bill. Instead of doing a half cent we'll probably do a full cent. We'll still keep the boundaries on it that we talked about and the back stop that was there. We'll do that. I don't think we'll have any problem moving it. I think it's a good piece of legislation. I think the people of Alabama deserve it and I think it's the right time."
No House version of the legislation has been filed yet. It would likely need to be filed on Tuesday if it is to be considered in committee on Wednesday. Section 70 of the Alabama Constitution requires revenue legislation to begin in the House of Representatives.
The Senate version has all 35 State Senators as co-sponsors.
State Sen. Andrew Jones (R-Centre) told 1819 News, "[W]e will likely start in the House just to make sure everything is constitutionally sound."
"We are working to gather co-sponsors down there," he added. "The bill that the Governor signs needs to be an HB (house bill) but we can help drive the conversation with the SB (Senate bill)."
Former State Rep. John Knight (D-Montgomery), a longtime advocate of eliminating the grocery tax, told 1819 News in an interview on Friday the issue was "something I've worked on for years trying to convince members of the legislature the importance of it so I'm glad that there is some attention being paid to it."
"I certainly want to see the entire four cents (eliminated). Sometimes you have to make baby steps and I accept that," Knight said. "The thing that I don't accept is the realization that the grocery tax is not the only issue that should be addressed. The state is so far behind in terms of working families and making sure things are fair. We have one of the most regressive tax structures in the country but so many people just fail to realize it. When you're looking at the exemptions that are there those are the types of things that I have tried to point out for years that we have to really do a complete revamping of our tax structure to make it fair for working families of this state."
The legislation would also set the local sales tax rate on food at the general or retail sales tax rate in effect when the legislation is signed into law. Local governments could elect to lower their tax rate on food, but they couldn't raise it if the bill becomes law.
To connect with the author of this story or to comment, email caleb.taylor@1819News.com.
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