September begins this Sunday. One difference Alabama shoppers will notice is that the state sales tax on groceries will not be cut additionally. The Montgomery Department of Revenue says the tax on groceries will remain at three percent effective Sept. 1. The food tax, which funds education, was cut by one percent. There was no three-and-a-half percent revenue increase this year. There was only a half-percent increase in 2024, so the food tax will remain the same until possibly September 2025. Advocacy group Alabama Arise says lawmakers should find another source of revenue for schools.

The news website Kiplinger quotes the Census Bureau’s ongoing Household Pulse Survey, which found that around 18 million respondents said their household did not have enough food “sometimes” in the past seven days. This report is from June. Food supply data also shows that nearly 70 million Americans said their household had enough food – but not always the type of food they wanted.

Alabama is one of 12 states that still taxes food. Our state passed a bill that would cut Alabama’s food tax by 2%. The first 1% cut went into effect last September, reducing the state’s tax rate from 4% to 3%. As APR reported, there will be no increase starting Sunday because of the small increase in tax revenue for schools.

Arkansas, Idaho, Illinois, Kansas, Missouri, Oklahoma, South Dakota, Tennessee and Utah reportedly impose taxes on food. Hawaii technically imposes an excise tax on food. And Mississippi leads the nation with a food tax of seven percent.

APR News reported on the first food tax cut in September 2023.

At the time, APR listeners heard Chris Sanders, communications director for the nonprofit Alabama Arise, speak to Alabama Public Radio as the state legislature passed the bill. Sanders said this discount will become more important as food prices continue to rise across the country.

“Passing this bill is a win for all Alabamians, and this grocery tax cut will benefit every single person in Alabama,” he said. “It will make it easier for people to make ends meet and provide for their families. This is a big step toward righting the wrongs of our state’s flawed tax system.”

Sanders said he supports the complete elimination of the grocery tax and is encouraged by the progress this bill makes toward that goal.

“When you think about the food tax, it’s a tax on survival,” he said. “Food is not an option. We all have to eat to live. It’s not a luxury. It’s not a choice. We all have to buy food. We all have to have food to live, and taxing the basic necessities of life like that is, in my view, immoral. It’s a bad choice.”

Alabama Arise has held hearings this summer with communities that could be affected by the grocery sales tax and its potential reduction. Sanders said the grocery tax makes it much harder for people to make ends meet, and rising food prices make a tax deduction for needy families even more necessary.

“History tells us that prices of food and everything else tend to rise over the decades,” he said. “This food tax cut will only increase in value and importance as prices continue to rise over the years and decades. We’re really happy to have this on the books now.”

Using data from the U.S. Department of Agriculture (USDA), Alabama Arise staff estimate that a family of four could save about $150 per year with the one-cent discount.