MONTGOMERY — A bill to cut the grocery tax in half over the next four years has been filed in the Alabama House of Representatives.
House Bill 479 (HB479), sponsored by State Rep. Danny Garrett (R-Trussville), would reduce the current 4% tax rate by a half-percent each year until it reaches 2%.
The bill would define "food" by the Supplemental Nutrition Assistance Program (SNAP), a hotly debated subject in this legislative session. Some lawmakers wanted to use the narrower definitions used in the WIC (Women, Infants and Children) program. Using the SNAP definition will mean more foods are getting taxes slashed.
The bill has 98 House co-sponsors, and every member of the Senate has pledged to support it when it reaches their body.
Beginning September 1, the tax rate will be reduced to 3.5%. On Nov. 1, 2024, and on November 1 of every year thereafter, until the tax rate reaches 2%, the tax rate shall be reduced by one-half of 1%, provided. However, 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. Once fully implemented, the plan would reduce state tax revenue in the ETF by $304 million.
Although filed this week, House Speaker Nathaniel Ledbetter (R-Rainsville) said the bill would likely be changed through the committee process, but he does expect it to reach the house floor on Thursday.
"There will be some changes from the House side, and we'll see that implementation Wednesday out of committee, and then we'll have it on the floor Wednesday," Ledbetter said.
Last week, Ledbetter said he wanted to see the cut rate to be at a full percent rather than a half, which could be the changes he anticipates in committee.
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