Alabama’s grocery tax reduction: A penny saved, a better future paved

Published 5:36 pm Tuesday, September 12, 2023

By Akiesha Anderson

Alabama Arise

The first stop on the road to untaxing groceries in Alabama is straight ahead. Lawmakers achieved a significant victory for the people this year by passing legislation to cut the state’s 4-cent grocery tax by half. That change began this Labor Day weekend, as the first 1-cent reduction took effect Sept. 1.

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Ultimately, this small change likely will result in large savings for Alabamians who are working hard to make ends meet. Once the new law is fully implemented, many families will have hundreds of dollars more available each year to spend on food or other expenses.

For decades, Alabama Arise has focused on reducing and ultimately eliminating the state sales tax on groceries, which essentially taxes survival. At the beginning of the 2023 legislative session, Alabama stood as one of only three states with no tax break on groceries. Thanks to determined advocacy by Arise members and other advocates, our state is off that shameful list at last.

Arise collaborated this year with many partners and lawmakers to introduce and pass the grocery tax reduction. That list includes the Alabama Grocers Association, Lt. Gov. Will Ainsworth, Sens. Andrew Jones and Merika Coleman, and Reps. Danny Garrett and Penni McClammy. This year’s breakthrough also would not have happened without other legislative champions who laid the groundwork for this moment, including former Reps. John Knight and Thad McClammy, former Sen. Hank Sanders and Reps. Laura Hall and Mary Moore.

The grocery tax law’s passage is a testament to the importance of continuing to hold the line and fight for change for as long as it takes. It’s also a testament to the importance of seizing the moment when opportunity arrives. Something spectacular happened this year as the stars finally aligned after decades of advocacy.

When this year’s session began, many Alabamians were struggling with inflation and higher costs for essentials like eggs and bread. Simultaneously, the state was witnessing strong revenue growth. As elected officials began talking about one-time tax rebates, advocates recognized an opportune moment to make permanent progress on reducing the state grocery tax. And the revenue growth ensured this reduction would not cause severe harm to funding for our children’s public schools.

State leaders seized this window of opportunity and united across partisan lines to reduce the grocery tax. It was amazing to witness the culmination of decades of hard work. And it was inspiring to see nearly every legislator co-sponsoring this monumental legislation. Many lawmakers tout this as the state’s largest tax cut ever, and it is one that will provide the biggest everyday benefit to people with low incomes.

Ultimately, Alabama Arise remains dedicated to transforming the state’s regressive tax system into a more progressive one. Progressive tax systems levy taxes based on one’s ability to pay, whereas regressive systems work in the reverse. The grocery tax has long exemplified regressive taxation, burdening those with fewer resources by requiring them to pay proportionally more than wealthier individuals.

Reducing the state grocery tax is a step in the right direction for tax justice. This penny saved is symbolic of a better future being paved for Alabama.

Arise will continue advocating to eliminate the state grocery tax while protecting Education Trust Fund revenues. We look forward to working with the new Joint Study Commission on Grocery Taxation to find a sustainable path forward. Rebalancing Alabama’s upside-down tax system will require both lower taxes for people with low incomes and higher taxes for wealthy households and highly profitable corporations that can afford to pay more.

As this year’s grocery tax reduction takes effect, we celebrate its many champions – most notably the Alabamians who stayed vigilant to ensure their voices translated into tangible policy improvements. We also celebrate this policy change as a symbol of progress and unity, and as a testament to what state leaders can accomplish when they put partisanship aside to pass legislation with profound benefits for individuals and communities.

Cheers to eliminating the first cent, and to the ongoing journey toward a more prosperous and equitable Alabama!

Akiesha Anderson is policy and advocacy director of Alabama Arise, a statewide, member-led nonprofit organization advancing public policies to improve the lives of Alabamians who are marginalized by poverty. Arise’s membership includes faith-based, community, nonprofit and civic groups, grassroots leaders and individuals from across Alabama. Email: akiesha@alarise.org