A “legislative fix” might be needed to a 2023 grocery tax cut law after the City of Hoover said on Tuesday it wasn't implementing a planned local grocery tax cut due to state restrictions, according to State Sen. Andrew Jones (R-Centre).
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 on Tuesday the State of Alabama is blocking a 0.5% local grocery tax cut that was supposed to go into effect on Tuesday. A city official said the reduction wasn’t going to happen because the state required the cut 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 2023 state law passed.
Jones, one of the law’s sponsors, told 1819 News on Wednesday, “The intent of the bill was for counties and cities to be able to reduce their local grocery tax rates by any amount up to 25% of the initial levied rate in a given year.”
“I am looking at a legislative fix to clarify our intent. In any case, it appears to be a moot point in this situation, as Hoover did not have adequate budget growth for any cut this year. We may also need to look at the growth requirement in the bill and determine whether it should be set lower. These safeguards were requested by the Alabama Association of County Commissions during the drafting of the grocery tax legislation,” he added.
To connect with the author of this story or to comment, email caleb.taylor@1819News.com.
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