Alabama state lawmakers adopted what they described as a “historic” tax cut to groceries on Thursday.

The bill — HB479 — still requires the governor’s signature before it’s law.

Here are some questions answered about what this tax cut means.

When does the tax cut take effect?

The 4 percent sales tax rate on groceries in Alabama will go down to 3 percent on September 1.

Does that mean if my city’s overall sales tax rate 10%, my grocery bill’s new tax rate will be 9%?

Yes. The full sales tax rates for cities and counties and special taxing districts remain and are not cut as part of this legislation.

In Mobile and Montgomery, the overall sales tax rate is 10%. With the cut, the overall sales tax rate on your grocery bill in those two cities will be 9%.

Dothan, Auburn and Huntsville all have overall sales tax rates at 9%. The cut will reduce the rate on grocery purchases to 8%.

Sales tax rates differ from city to city. To find out your city’s overall sales tax rate, visit the Alabama Department of Revenue’s website: https://www.revenue.alabama.gov/sales-use/tax-rates/

Will I get a rebate on groceries I purchase between now and September 1?

No. The law will not take effect until Gov. Kay Ivey signs the legislation. Once she does, the tax cut will not begin until September 1.

So now instead of 10% sales tax, I’ll pay 8%?

Maybe. The second 1 percentage point of the sales tax cut could take effect on September 1, 2024. But that cut depends on the health of the economy, and whether the revenues in the state’s Education Trust Fund have grown by 3-1/2% over the previous fiscal year.

How much will a typical family save in groceries?

According to Alabama Arise, the typical Alabama family will save $150 per year in groceries under the 1 percentage point reduction in the sales tax. Under the full 2 percentage point decrease, the savings goes up to an estimate $300 per year, or $25 per month.

Is there a website where I can go to calculate my savings?

Not at this time.

What would prevent the full 2% cut from taking place?

State lawmakers say the 3-1/2% growth figure is the average annual growth rate for the ETF. But some are concerned over an economic slowdown. If the growth rate does not exceed 3-1/2%, then the final 1 percentage point of the sales tax cut does not take effect.

If the growth doesn’t happen, will the 2% tax cut ever occur?

Yes. There is not time limit to when lawmakers can implement the final 1 percentage point cut in the state’s sales tax on groceries. If the 3-1/2% growth doesn’t take place next year, then lawmakers can revisit it in subsequent years.

What grocery items will apply?

The legislation uses the same definition of food as the federal Supplemental Nutrition Assistance Program, or SNAP. SNAP foods include almost all foods found in the aisles of a grocery store: Fruits, vegetables, meat, poultry, fish, dairy, breads, cereals, snack foods, non-alcoholic beverages and the seeds and plants that produce food.

What is not covered?

For one, prepared foods often found in the deli of a grocery store like rotisserie chicken, salads and sandwiches. Beer, wine and other adult beverages would also not apply. The tax also does not affect any foods purchased at a restaurant.

What about the rest of the sales tax on groceries? Will it get cut?

Not any time soon. State lawmakers are going to assess the impact of the first 2 percentage point cut to see if the remaining 2% of the state’s sales tax on groceries should be eradicated. The full 4% state sales tax on groceries brings in $600 million each year to the state’s Education Trust Fund.

The remaining balance of sales tax rate is assessed by cities and counties. Few — if any — have expressed interest in immediate cuts to their sales tax rate on groceries.

Why are cities and counties not following suit?

Cities and counties rely on sales tax revenues to fund the basic services of government such as paying the salaries of police officers, firefighters, and public works crews to funding capital improvement projects like sewer line extensions and paving roads.

In Alabama, the sales tax is dominate revenue source for municipalities and counties. Property taxes in Alabama are lower compared to other states, making the revenues generated through sales tax crucial to funding local government.

Can cities and counties raise their taxes to make up for the state cut?

No. Once the legislation is signed by the governor, the sales tax rate on groceries is capped. Cities and counties cannot increase their rates on those items.

Theoretically, a city or county government could raise their sales tax rates to include groceries between now and whenever the governor signs the bill. But as one lawmaker noted, such a move would likely be politically unpopular.

Can cities and counties cut their rates?

Yes, of course. There is a provision in the legislation that allows the cities and counties to cut their sales tax on groceries.

But is that tax cut limited?

Yes. According to the bill, any city or county can reduce their local sales tax rate on groceries by 25 percent. But that only occurs if city or county General Fund exceeds 2% over the prior year.

If there is a downturn in the economy, could cities and counties increase their sales tax on groceries?

Yes. If a city or county government decides to cut their local sales tax on groceries, they can increase the rate back to the level of where that rate was at when HB479 is signed into law by the governor.

The city or county government cannot go above that rate, however.

Can grocery stores raise their prices to accommodate for the tax cut?

There is nothing in the legislation that mandates grocery stores do anything regarding food pricing.