The State of Alabama Lawmakers Agree to Reduce State Sales Tax on Food

Alabama lawmakers agreed on Tuesday, May 6th, to reduce the state sales tax on food and completely remove diapers, baby formula, and menstrual hygiene products from the state sales tax.

The Alabama Senate adopted both legislation by a vote of 34-0. The measures will now be presented to Governor Kay Ivey for signature. The food tax cut comes as lawmakers from both parties claim that rising supermarket prices are causing hardship for families. If approved into law, the state sales tax on food will be reduced from 3% to 2% effective September 1st, 2025. In 2023, lawmakers cut the tax rate from 4% to 3%.

An additional 2% cut was intended, but it was contingent on budget growth, which did not occur. The cut will cost the state approximately $121 million per year in tax income that would otherwise go to the Education Trust Fund.

The leader of Alabama Arise, an advocacy group that advocates measures that benefit low-income families, stated that the grocery tax belongs in the “dustbin of history.” Lawmakers also passed a bill exempting baby formula, maternity apparel, diapers, and menstrual hygiene products from state sales tax. Baby wipes, breast pumps, and bottles would all be exempt.

The exemption from the 4% sales tax will cost the state around $13 million each year.