Alabama is one of the only states to charge a sales tax on “essential” foods like milk and eggs, but as food prices soar due to inflation, one state senator has drafted a bill to lift the tax burden.
State Sen. Arthur Orr (R-Decatur), who chairs the State Senate’s Education Budget Committee, is introducing legislation that, if passed, would gradually decrease the now four-cent sales tax on groceries for certain products, provided that the revenue from the tax continues to grow by 2% or more per year.
The gradual tax reduction would only apply to foods deemed “essential” by the Women Infants and Children (WIC) program, a federal assistance program operated by the U.S. Department of Agriculture (USDA).
Currently, revenue from the state grocery tax is the primary source of funding for the Education Trust Fund (ETF). Orr’s provision would reduce the four-cent tax by one cent per year unless ETF revenue does not increase by over 2%.
Orr told 1819 News that he didn’t want to jeopardize education in the state and that the state couldn’t afford a wholesale elimination of the grocery tax. That’s why he included this “pause button” provision.
“By phasing it in over a period of years [it is] more easily absorbed into the education budgeted as a reducer of revenue,” Orr explained.
Orr also included a provision to prevent cities and counties from adding their own grocery taxes as the state pulls away.
The Alabama Legislature can’t file bills for the regular session until the current special session ends. Orr predicts the special session will end this week. Once the regular session begins again, he plans to file his bill.
“I think it’s a proposal that will certainly garner discussion,” Orr predicted. “Someone else may have a better idea. I’ve not seen that to date, in my opinion.”
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