Here's what a possible change in the grocery tax means for your wallet
Alabama lawmakers are taking up the issue of reducing the state's grocery tax. Right now, consumers pay a 4% state sales tax on groceries. This amount to several hundred dollars a year, according to Alabama Arise, a group advocating for the tax reduction.
"A good rule of thumb is the think about what you and your household spend in two weeks on groceries. Groceries being just food... Think about the amount you spend in two weeks. That's equivalent to what you pay every year the state grocery tax yearly. For the average family of four, our research shows that鈥檚 about $600 a year," said Robyn Hyden, executive director of Alabama Arise.
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One proposal before lawmakers would reduce the tax by half a percent a year, until it's cut from 4% to 2%. Reducing the tax could mean a savings of a few hundred dollars a year for the average shopper.
Reducing or eliminating the grocery tax has been talked about for years, but this session has really gained traction. State Sen. Andrew Jones, who represents District 10, introduced the bill. Jones says the high cost of groceries may have helped put this issue front and center.
"I think it's a combination of a number of things which are linked. One, it's the state of the economy and inflation. It's some of the highest inflation we have seen in a long, long time. Because of that inflation folks are paying more in grocery tax. The tax rates haven't change. The tax rates are the same they have been as far as the state is concerned." Jones added. "The idea this is regressive tax and something that negatively impacts working Alabamians" has also played a role in this being widely considered this year.
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The money generated from this grocery tax currently helps fund the state's education fund. Jones says there would be a framework in place to protect the education budget.
"We have a safeguard in place in the bill that says there has to be 2-percent positive growth in the Education Trust Fund for a drawdown to occur," Jones said.
The bill is expected to move in the Alabama State House next week and should move the following week in the Alabama State Senate. Jones is hopeful and encouraged by the near-unanimous and bipartisan support for the bill this session.
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