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AL SB177
Bill
AI Summary
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Defines "food" for sales tax purposes as items on the WIC (Special Supplemental Nutrition Program for Women, Infants, and Children) state food list meeting federal requirements in 7 CFR Part 246.10 and WIC Policy Memorandum #2015-3.
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Reduces state sales tax on food from 4% to 3% effective September 1, 2023, with additional 1% reductions on November 1 of every odd-numbered year thereafter until reaching zero, contingent upon Education Trust Fund revenue growth of at least 5% above the prior odd-numbered fiscal year.
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Establishes county and municipal food sales tax rates as the general retail sales tax rate in effect on the bill's effective date, with existing local food taxes remaining operative but no new local food taxes allowed.
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Allows counties and municipalities to reduce or exempt food from local sales and use taxes through ordinance or resolution, requiring at least 60 days' notice before effectiveness.
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Becomes effective September 1, 2023.
Legislative Description
Relating to sales taxes; to amend Section 40-23-1, as last amended by Acts 2022-199 and 2022-291, 2022 Regular Session, Code of Alabama 1975, Section 40-23-2, as last amended by Act 2022-346, 2022 Regular Session, Code of Alabama 1975, Section 40-23-60, as last amended by Act 2022-199, 2022 Regular Session, Code of Alabama 1975, and Section 40-23-61, Code of Alabama 1975; to define "food" and begin phasing-out the state sales and use tax on food on September 1, 2023; to require certain growth targets in the Education Trust Fund for future sales tax reductions on food; to establish the sales and use tax rate on food for purposes of county and municipal sales and use taxes as the existing general or retail sales and use tax rate; and to authorize a county and municipality to reduce the sales and use tax rate or exempt food from local sales and use taxes.
Last Action
Introduced and Referred to Senate Finance and Taxation Education
4/5/2023