Home Part of States Newsroom
What the grocery tax says about Alabama government


What the grocery tax says about Alabama government

May 30, 2023 | 7:58 am ET
By Brian Lyman
What the grocery tax says about Alabama government
A young mother with a shopping cart grocery shopping for baby products in a supermarket. (Getty)

When Alabama enacted the state sales tax in 1939, some legislators tried to exempt what they called “basic foodstuffs.” 

These were the elements of a traditional southern breakfast: milk, flour, cornmeal, sugar and coffee. The state had spared all these from the gross receipts tax, the predecessor to the sales tax. 

Gov. Frank Dixon and most legislators didn’t like this. Food could be a major source of revenue, especially in a state where the wealthy had foiled any kind of practical property tax system. 

“Administration forces have contended that exemptions must be eliminated to stop what were termed ‘wide-spread evasions,’ and asserted the tax, without exemptions, would not fall unduly heavy upon those least able to pay,” the Associated Press reported on Jan. 31, 1939. 

It’s typical of Alabama. Tax people least able to bear it; claim it’s not as bad as you think and suggest that the poorest in the state are criminals. 

But even as they made everyone’s food more expensive, legislators voted to exempt livestock from the new levy. 

It was the first big exemption from the sales tax. But not the last. 

You don’t pay state sales taxes on baby chicks. Or the litter they use. Or the pallets used to ship them. 

Grass sod and forest tree seedlings? No sales tax on those. 

If you’re in the market for a railroad car, the state of Alabama won’t assess a sales tax on that.

But food?

There are a handful of food-related exemptions, such as produce sold at farmers’ markets and items delivered to hospitals that treat mental illness. But generally, state and local governments want you to pay up to 10% on your groceries. 

Taxing food but not chicken litter is absurd, as advocates for reducing or eliminating the grocery tax have argued for years. 

So it’s welcome that after 84 years, we might be close to a reduction in the grocery tax.

A bill that could cut the Alabama levy from 4% to 2% — assuming growth in the Education Trust Fund covers the reductions – passed the House of Representatives on Thursday

The legislation, sponsored by House Ways and Means Education committee chair Danny Garrett, R-Trussville, would also freeze local sales taxes on groceries. The bill is in the Senate, and most senators say they want to see the grocery tax reduced.

Sounds good, right?

Except the bill only began moving on Wednesday, the 25th day of a 30-day legislative session. It passed on the 26th day. Lawmakers threw the 27th day away to get the budgets passed

The reduction needs at least two days to get to Gov. Kay Ivey. Legislators have three days to do it. There’s not much room for error. 

Still, I’m optimistically cautious. And to be fair, cutting the grocery tax isn’t easy. The levy brings something north of $600 million into our $8.2 billion education budget, about 7.3% of the total. 

But why has it taken so long?

The grocery tax is hated, and repeal is widely popular. Legislators who were responsive to their constituents would have been working for years to cut it. 

Consider how quickly the Legislature moved on a package of economic development bills this spring. The legislation, sponsored by Democrats and Republicans, included an increase in tax credits for job creation; authorized tax credits for small businesses and made money available for industrial site development.

These, in effect, are tax cuts. I’m skeptical that they actually help the state attract business, and I’m not alone thinking that. But I know our lawmakers consider them important.

I know this because they held a press conference praising the bills in the Montgomery Biscuits’ stadium, a jumbotron broadcasting the name of the package behind them, talking about the legislation as if the state’s economy couldn’t grow without it. 

I know this because the bills were filed, passed and signed by Ivey in a little over two weeks in April. 

Meanwhile, efforts to repeal the grocery tax, an unquestionable burden on Alabamians, go all the way back to 1977, if not earlier. Despite the efforts of legislators like former Rep. John Knight of Montgomery and groups like Alabama Arise, they’ve rarely gotten further than committee discussions.

Economic development bills move quickly because they chiefly benefit developers and large business owners. If you represent one or both of those groups, you (or your lobbyists) have a standing invitation to meet with Alabama lawmakers. Repeat the word “jobs” in plainchant and you can get them to cut just about any tax you want. 

But if you’d like the state to stop adding $20 or $30 or $50 to your grocery bill? 

Hands go into pockets. Deep sighs are uttered. That tax is too important for our schools. It’s pointless to suggest that the state would be better off replacing that revenue with fairer taxes on the wealthiest. You might as well speak Esperanto.

This is how our government was designed. White planters and industrialists in the nadir of race relations wrote our Constitution. They had bad memories of a multiracial political coalition that almost brought democracy to the state in the early 1890s. 

So they cut Blacks and poor whites out of the electorate and ensured that the biggest interests would have the loudest voices in the Alabama Legislature. 

And legislators have to satisfy the big interests, more than voters.

Which makes it easy to protect baby chicks and railroad cars and livestock. And to splash tax cuts on businesses that don’t need them. The people who want those things will always take precedence.

The rest of us, and our food bills, are an afterthought.