Alabama should embrace the opportunity this year to remove the state sales tax on groceries in a sustainable and meaningful way, the nonprofit Alabama Arise Action told lawmakers.
More than 100 Arise supporters gathered for a news conference outside the State House in Montgomery on Tuesday to show their support for this change. State Sen. Merika Coleman, D-Pleasant Grove, and Rep. Penni McClammy, D-Montgomery, both spoke there Tuesday in support of untaxing groceries.
“We’re here... to ask our lawmakers to end the state grocery tax quickly and responsibly,” Alabama Arise Action board president Kathy Vincent said. “This is the year to finally untax groceries once and for all.”
Alabama Arise Action suggests why and how to end the state grocery tax :
Alabama is one of only three states, along with Mississippi and South Dakota, with no tax break on groceries. And Alabama is the only state to allow a full state income tax deduction for federal income tax (FIT) payments. Because wealthy people pay more in federal income taxes on average, the state’s FIT deduction overwhelmingly benefits rich households.
“We call this the FIT, or FIT deduction, and it should give you a fit,” Coleman said. “You should have a fit, because it’s an unfair tax break that disproportionately lowers taxes for the wealthiest people.”
Coleman said she will introduce a bill to repeal the state’s 4% sales tax on groceries and replace the revenue by ending the FIT deduction. Her plan would allow Alabama to end the state grocery tax while fully protecting funding for public schools.
The state sales tax on groceries brings in about $600 million a year for the Education Trust Fund (ETF). Meanwhile, the FIT deduction costs the ETF more than $900 million a year, estimates show. Revenue from both the sales tax and individual income tax go to the ETF.
McClammy and Sen. Andrew Jones, R-Centre, are preparing other bills to reduce the state grocery tax. They have not yet publicly revealed the details of that legislation.
McClammy said Tuesday that she hopes to file her bill as soon as next week. After more than 20 years of debate about untaxing groceries in Alabama, it needs to happen this year, she said.
“I hope and I pray that next year, when we come back here again, it’s not Groundhog Day,” McClammy said. “A change has got to come.”
Alabama Arise Action says there's broad public support for untaxing groceries in the state:
Arise shared its principles for an ideal plan to untax groceries Tuesday. Those principles call for an immediate grocery tax reduction that protects funding for public schools. They also include a grocery tax cut that applies to a broad range of foods, not a limited subset. Arise’s preferred legislation would untax food as defined in the federal Supplemental Nutrition Assistance Program (SNAP).
Public support to untax groceries is strong across Alabama. Seven in 10 Alabamians support ending the state grocery tax, according to a new poll released this week. And nearly three in five Alabamians support removing the state grocery tax while protecting education funding, according to a poll commissioned by Alabama Arise last year.
“Get rid of this grocery tax now. That is the message, loud and clear,” Alabama Arise Action executive director Robyn Hyden said. “Everybody wants this to pass. We don’t want any more excuses.”
Alabama Arise Action is 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. Alabama Arise Action is the 501(c)(4) partner organization of Alabama Arise.