Bill > HB427

This bill eliminates the sales and use tax on food in Alabama, phasing out the tax rate gradually before completely removing it on September 1, 2025. Currently, the state levies a sales tax on food at 4%, which was already reduced to 3% on September 1, 2023. The bill removes the previous conditional language that tied the tax rate reduction to specific growth requirements in state revenue. Instead, it definitively sets the food sales tax rate to zero percent on September 1, 2025, effectively making food sales completely exempt from state sales and use taxes. This change applies to both retail sales of food and the use tax for food purchased for personal consumption. The bill amends two sections of the Alabama Code (40-23-2 and 40-23-61) to implement this tax elimination, with the act becoming effective on June 1, 2025. By removing the sales tax on food, the legislation aims to reduce the cost of living for Alabama residents by making essential food purchases less expensive.

Budget and Finance

https://alison.legislature.state.al.us/bill-search