Alabama House votes to end sales tax on diapers, baby formula, menstrual products
Alabama consumers would no longer pay the state sales tax on diapers, baby formula, menstrual hygiene products and other items under a bill approved today by the House of Representatives.
The bill, by Rep. Neil Rafferty, D-Birmingham, would save taxpayers an estimated $13 million a year by removing the 4% state sales tax.
The exemption does not apply to county and municipal sales taxes unless approved by county commissions or city councils.
The legislation follows several other tax cut bills approved by the House on Tuesday.
Rafferty’s bill applies the tax exemption to baby formula, baby bottles, baby wipes, breast milk pumping equipment, breast pump, diapers, maternity clothing, and menstrual hygiene products.
The House adopted an amendment by Rep. Ginny Shavers, R-Leesburg, to apply the exemption to adult diapers.
The bill passed by a vote of 102-0. It moves to the Senate.
On Tuesday, the House passed a bill to reduce the state sales tax on food from 3% to 2%, which is estimated to save taxpayers about $123 million a year.
Another bill approved Tuesday would increase a state income tax exemption on income withdrawn from individual retirement accounts and 401(k) accounts from $6,000 to $12,000. Taxpayers 65 and older would be eligible for the exemption.
That bill is estimated to save taxpayers about $45 million a year.
A third bill passed on Tuesday would make several changes to the state income tax that would save taxpayers an estimated $25 million a year.
All the bills passed without a dissenting vote. They all move to the Senate.
Lawmakers still face a decision on whether to extend an exemption to the state income tax on overtime pay, which has been in effect since January 2024.
That exemption is scheduled to expire at the end of June. House Democrats held a news conference on Wednesday calling for the exemption to be made permanent.
The overtime exemption saved taxpayers $230 million during the first nine months of 2024, according to the Alabama Department of Revenue.
Lawmakers are trying to balance the benefits of tax cuts for citizens and the impact on the Education Trust Fund, which relies mainly on income taxes and sales taxes to support public schools.