Grocery tax drops on Sept. 1 in Alabama

MONTGOMERY, Ala. (WIAT) — A change in sales tax could save you some change in line at the grocery store.

A cart full of goods now comes with greater savings. Starting Sept. 1, the state tax on groceries will be 2% instead of 3%. According to Ellie Taylor, president of the Alabama Grocers Association, that could mean a savings of $125 a year for a family of four.

“As a grocery industry, we’re really excited about the reduction of the tax,” Taylor said. “The grocery tax is a regressive tax that affects those who can afford it the least, the most.”

Sen. Arthur Orr (R-Decatur) said that reduction will cost the education budget around $120 million, but it’s well worth it.

“It’s something we thought we could manage. Particularly in light of the expiration of the overtime tax. Which was picked up by the federal government, where they have now exempted overtime taxes,” Orr explained.

Families can also look forward to cheaper diapers and maternity clothes. Rep. Neil Rafferty (D-Birmingham) explained a 4% state tax on feminine and baby products will also be removed on Monday.

“We’re bound to know somebody, love somebody or have in the future- be in that situation where these pennies will go an extra mile for these families,” he said.

Sen. Orr said those pennies can also be removed on the local level, if a city chooses. He said all of these state tax reductions will be beneficial.

“Those will help taxpayers across the state as they, maybe encounter increased prices at grocery stores,” Orr said. 

Sen. Orr said the goal would be to completely remove the state tax on groceries down the road, but it will take a while to get there. He said costs are going up in state government, and lawmakers have to avoid a bad fiscal situation.