It’s not something you think about every day, but your daily bread costs you a little more in the state of Alabama than in almost every other state in the country.
That’s because Alabama collects sales tax on all the food you buy at the grocery store.
Many see it as a regressive tax - a hardship on low-income households.
Legislators in Montgomery promise to look at repealing it, but there’s a multi-million dollar hurdle to overcome.
Kevin Scott is a frequent shopper at Kroger in Madison.
“It would help my bottom line. And this is one of my favorite stores. It would help me.”
He is a relative newcomer to Alabama,
“By way of Seattle,” he says, “where you pay higher taxes.”
But not on food, I reminded him.
“Not on food. You’re correct. Not on food,” he said.
He’s one of many shoppers we talked to who would love to see an end to the sales tax on food. Alabama is one of three states still collecting sales tax on food with no exemptions.
Four cents for every dollar on top of the 4 percent to 6 percent your city and county also collect. And that’s a pretty big hit for a lot of folks, for something they literally can’t live without.
We caught up with Lolita Byrd right after checkout to check out her receipt.
“How much is your tax?” I asked.
“There it is. ‘Total tax - $18.02.’ Yes. Isn’t that awful?” she said.
Like so many moving to Alabama from states that don’t tax food - Lolita's from Florida - she would like to see it changed – sooner rather than later.
It’s not that some state lawmakers are unsympathetic. House Minority Leader Anthony Daniels made his feelings clear during the Democratic response to Gov. Kay Ivey's State of the State address last week.
“We support doing away with the grocery tax once and for all. That’s right. It’s time to eliminate the tax on groceries.”
A few Republicans are moving down the same aisle. Sen. Clyde Chambliss is talking about introducing a bill this session.
There are several ways this could be done. The state’s 4 percent sales tax on food could just be eliminated.
Some states have opted to lower the tax rate to 1 or 2 percent. Some states have even implemented a refund program where you pay taxes on food during the year, but then you’re refunded at the end of the year.
State Sen. Arthur Orr told me they have considered a lot of different variables. Orr is chairman of the Senate Finance and Taxation Committee. He, too, claims he wants to eliminate this tax. He says the problem is the $400 million hole repealing the grocery tax would create in the state budget. That money is specifically earmarked for education.
“We’ve got to continue to make investments in education to move our children forward for the 21st century,” he said.
None of this would happen overnight. Repealing the grocery tax must be approved by voters. So, if a bill is introduced, and gets out of committee, and is passed by the Senate and House, voters would have the final say in November.
Meanwhile, back at the register, customer Cathy Bates, a native Alabamian, has never known anything but paying taxes on food.
She’s all for supporting education. Her daughter’s a teacher. She does not want to see cuts in funding. She feels the money could be made up with proceeds from a state lottery.
“That’s true. And also if they had a lottery it would go toward education, too, hopefully,” said Bates.
But Orr says a lottery won’t be the panacea some think it could be.
“The lottery revenue numbers are about $160 million, $180 million estimates,“ he said. “So we’re still not up to the $400 million level. But, arguably, that could be a scenario to be able to reduce the amount of taxes on food.”
Most shoppers we talked to agree. Alabama’s tax on food is hard to swallow. Just reducing it is a step in the right direction.
“Definitely!” said Byrd. “They’d have my vote. Because I think it’s really, really too high.”
Scott agrees. “Yes, I’d be very satisfied. Because this is my home now.”
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