The Senate Finance and Taxation Education Committee conducted a public hearing but did not vote Wednesday on one of two bills that have been introduced so far in the 2020 regular session that would remove the sales tax on food.
SB144 by Sen. Andrew Jones, R-Centre, is a constitutional amendment that would, starting with the 2021 tax year, reduce the federal income taxes paid deduction allowed on state income tax returns to a maximum of:
- $6,000 for individuals filing as single, head of household, and married filing separately; or
- $12,000 for individuals filing as married filing joint.
Jones’ constitutional amendment also would exempt food from the state’s 4% sales tax. City and county sales taxes on food would remain intact.
Jones said under his bill working class Alabamians would keep their FIT deduction while saving money on groceries. During the discussion, proponents said the bill would allow a family of four to save $318.24 each year on their grocery bill, the equivalent of two weeks of groceries.
Jones’ bill uses the federal Supplemental Nutrition Assistance Program (SNAP) definition of food, a provision the Alabama Retail Association emphasizes as being important to retailers. At least one committee member suggested waiving the state tax only on WIC-allowed foods, but others suggested the more restrictive food definition would not provide enough savings.
HB131 by Rep. Andrew Sorrell, R-Muscle Shoals, would phase out the 4% state sales and use taxes on food by reducing the state tax by one fifth of a percentage point 20 times starting Sept. 1, 2021. Food would be fully exempt from Alabama sales and use taxes by Sept. 1, 2040, under this plan. The House Ways and Means Education Committee has yet to consider the bill.
>> RELATED STORY: GOP-backed grocery tax repeal bills emerge in the State House (aldailynews.com)
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