Legislation is set to be pre-filed to loosen restrictions on when a city can implement a local grocery tax cut, according to State Rep. Mike Shaw (R-Hoover).
A law passed in 2023 that cut the state sales tax on groceries by 1% allowed cities and counties to cut their local sales tax on groceries by 25% by resolution or ordinance if the local government's revenues increased by more than 2% over the previous year's revenues.
The City of Hoover said last week the State of Alabama is blocking a 0.5% local grocery tax cut that was supposed to go into effect at the beginning of October. A city official said the reduction wouldn't happen because the state required the cut to be 25% of the rate. The planned .5% cut is less than 25%. The city also didn't meet or exceed the 2% revenue growth requirement in the 2023 law.
Hoover City Council passed the ordinance in October 2023 after the state law passed.
Shaw, a former Hoover City Councilman, said during a public comment period at a Monday meeting that a legislative fix was in the works.
"The citizens of Hoover thank you for making that tough vote because I've been in that seat, I've been in other seats where it's hard to cut taxes because on the other end you have got to make cuts. To have the courage to make that vote, I think our citizens are being well-represented. There are some other cities and counties, who will go nameless, who don't like to make those hard decisions. At their request, this law was amended, The original law didn't have some of the complications in there for cities," Shaw said.
"At their request, these additional requirements were added so they didn't necessarily have to make that vote. It's unfortunate, but hey, sometimes to get a law passed, you've got to make some give and take. State Sen. (Andrew) Jones (R-Centre) and State Rep. Danny Garrett (R-Trussville)...he plans to pre-file a bill that is going to strip all of that back out and put the power in the cities' hands which is where it should be. Y'all know what your city needs and other cities might not be able to make those cuts. I look forward to seeing what that is. The details are still being worked on, but I plan to support anything that is going to put the ability of a city to make those decisions. As far as my citizenship here, I'm thankful that we have a city council that's willing to make that hard decision. (It) didn't work out. We're going to fix it at the state level so city councils can make that decision."
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