Members of the Alabama House Ways and Means Education Committee passed legislation that would cut the state's sales tax on groceries by 2% on Wednesday.
Currently, the state's sales tax rate on groceries is 4%. House Bill 479 by State Rep. Danny Garrett (R-Trussville) would drop the rate by 1% in September and an additional 1% in 2025 if certain revenue projections in the Education Trust Fund are met.
According to a fiscal note on the legislation, the tax cut would reduce revenue in the Education Trust Fund by $318 million annually once fully implemented.
Alabama is one of a few states that still taxes groceries at the state's full sales tax rate.
Lobbyists for the School Superintendents of Alabama and the Alabama Education Association (AEA) spoke against the legislation.
"Alabama is the second-lowest taxed state in the country," Allison King, government relations director for the AEA, said in committee on Wednesday. "Many states may not have a grocery tax, but they have something we don't: substantial property taxes. AEA is not against cutting grocery taxes, but we are against cutting grocery taxes without an equally-reliable funding source to replenish the lost revenue."
Garrett argued the state would be able to absorb the tax cut.
"We have taken the current scenario we have with all of our funding," Garrett said. "We've looked at the projected revenue, the budget, the spending, the reserves, all of that. We factored in a mild recession. We're confident we can handle this as proposed."
The bill still has to be passed by the House and Senate and signed into law by Gov. Kay Ivey. The bill has 100 co-sponsors in the House and 35 in the Senate.
To connect with the author of this story or to comment, email caleb.taylor@1819News.com.
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