Newly proposed bill could phase out Alabama’s tax on essential food
MONTGOMERY, Ala. (WAFF) - A new proposed bill could finally get the wheels moving on eliminating Alabama’s tax on essential foods.
It would remove one percent of the four percent state sales tax every year on foods covered by the WIC federal program. This includes milk, cheese, eggs, fruits, vegetables, cereal, whole grain bread, canned tuna, and infant formula.
Alabama lawmakers have discussed plans to remove the state’s tax on groceries, but no bills have passed. A major cause for concern is the potential revenue loss to the Education Trust Fund. The tax brings in nearly $500,000 million dollars annually to the ETF, which mainly funds public schools.
Bill sponsor Senator Arthur Orr said the tax removal on essential foods would cost the state’s education trust fund $240 million annually. He believes that’s manageable due to the ETF being in surplus.
The bill calls for safeguards by pausing the yearly tax cut if the ETF does not increase by 2 percent annually.
The senator said this bill comes at a time when Alabamians need it most.
“Families are struggling out there at the cash register, when they go to pay for groceries, and when they’re getting the staples of life,” said Senator Orr. “And so this is something that will certainly help them in their daily life if we’re able to remove this tax permanently on these essential food groups.”
Orr said he plans to introduce his bill when the Legislature resumes its regular session on March 21.
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