Alabama’s grocery tax is set to decrease on Friday.

A bill passed in the Alabama legislature during its last session cleared the way for a grocery tax cut effective Sept. 1. On that day, the 4% sales tax rate on groceries will go down to 3%. City and county sales taxes will remain the same but shoppers will see the difference – however slight – on the bottom line.

According to Alabama Arise, the 1 percentage point reduction will save an Alabama family of four about $150 a year.

The sales tax rate is expected to drop an additional 1 percentage point in September 2024, bringing the total two-year cut to 2 percentage points – but only if the state’s Education Trust Fund has grown by 3-1/2% over the previous fiscal year. If the growth projections don’t occur, the second 1% cut will be delayed until the ETF growth requirement is met.

READ MORE: Alabama Gov. Kay Ivey signs grocery tax cut bill

The full 2 percentage point reduction would save the average family up to $300 a year.

The reduced sales tax does not apply to all grocery items. Qualified foods are those defined by the Supplemental Nutrition Assistant Program, or SNAP, the formal name for food stamps : Fruits, vegetables, meat, poultry, fish, dairy, breads, cereals, snack foods, non-alcoholic beverages and the seeds and plants that produce food. Prepared foods, such as hot deli items, as well as beer, wine and other adult beverages are not subject to the reduction.