by Alander Rocha, Alabama Reflector
May 9, 2025

Gov. Kay Ivey Friday signed a bill reducing the state sales tax on groceries.

HB 386, sponsored by Rep. Danny Garrett, R-Trussville, will cut the state share of the tax from 3% to 2% effective Sept. 1. 

“When we can reduce taxes in Alabama and provide some relief to the hardworking people of this state, I am all for it. I was pleased to sign House Bill 386 to take another notch off our state grocery tax,” Ivey said in a statement.

Alabama is one of just a few states that still taxes groceries. Until September 2023, the state taxed groceries at the full 4% state sales tax that’s been around since 1939. Combined with local taxes, the total tax on food in Alabama ran as high as 10% in some places. In Montgomery, a family spending $600 a month on groceries could pay up to $60 in taxes.

The Legislature in 2023 reduced the state sales tax on groceries from 4% to 3%. But it also required growth of at least 3.5% in the Education Trust Fund (ETF), which gets most of the grocery tax.  

Compared to the previous fiscal year, the current 2025 ETF has grown 3.28% this year, compared to the 2024 ETF at the same point, but budget chairs indicated they were comfortable with moving forward.

Under the new legislation, the tax bill on $600 worth of groceries in Montgomery will go from $54 to $48.

Lawmakers also changed the bill to allow local governments to reduce their sales and use tax on groceries, effectively combining HB 387 with the legislation — which the House passed in March and a Senate committee in late April.

Alabama Reflector is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Alabama Reflector maintains editorial independence. Contact Editor Brian Lyman for questions: info@alabamareflector.com.

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Note: The following A.I. based commentary is not part of the original article, reproduced above, but is offered in the hopes that it will promote greater media literacy and critical thinking, by making any potential bias more visible to the reader –Staff Editor.

Political Bias Rating: Center-Right

The content presented focuses on a tax reduction policy implemented by a Republican governor in Alabama, highlighting a legislative effort to cut sales tax on groceries. The emphasis on tax relief and fiscal conservatism aligns with center-right priorities. The article remains factual and neutral in tone, providing context on the legislation’s fiscal impacts without evident partisan commentary, indicative of a bias that leans moderately conservative but maintains an informative stance.