A newly enacted state law will bring a temporary change to how grocery items are taxed in Alabama. Governor Kay Ivey has signed Alabama Act 2026-604 into law, establishing a grocery sales tax holiday that runs from May 1, 2026 through June 30, 2026.
During this period, the state’s 2% sales tax on SNAP-eligible food items will be suspended. SNAP-eligible items generally include food or food products intended for home consumption, but do not include alcoholic beverages, tobacco, hot foods, or foods prepared for immediate consumption.
This exemption applies only to the state portion of the tax; local city and county sales taxes on food remain in effect.
Notice from Alabama Department of Revenue
Retailers must still report all gross sales of qualifying food items in their total gross proceeds on the state tax return and then subtract (deduct) the qualifying food sales from the amount used to calculate state sales tax.
We encourage members to review their point-of-sale systems and ensure they are properly configured to account for the temporary suspension of the state sales tax on qualifying food items beginning May 1.