Consumers would pay a lower sales tax on food under a bill that won approval in an Alabama House committee Wednesday morning, the latest sign that the idea of cutting the tax is gaining momentum.

HB479 by Rep. Danny Garrett, R-Trussville, would cut the state’s 4% sales tax on food to 3% effective Sept. 1. It would go down to 2% on Sept. 1, 2025. The reduction to 2% could be delayed until if projections indicate slow growth in the taxes that support education.

The House Ways and Means Education Committee approved the bill without opposition on a voice vote after a public hearing. It moves into position for consideration by the full House of Representatives as soon as Thursday.

About 100 of the 105 members of the House are listed as co-sponsors. All 35 state senators endorsed a similar bill introduced in the Senate, a plan that also has the support of Lt. Gov. Will Ainsworth.

Advocacy groups, including Alabama Arise, have said for decades that Alabama’s tax on food hurts low-income families who struggle to pay for other necessities like housing and medicine. Alabama is one of only three states that does not offer a reduced tax rate on food.

More recently, inflation has helped drive support for cutting Alabama’s food tax. The price of food rose 7.7% from April 2022 to April 2023, according to the U.S. Bureau of Labor Statistics.

HB479l specifies that the tax cut will apply to foods eligible under the Supplemental Nutrition Assistance Act, or SNAP, previously called food stamps.

Todays’ vote came after a public hearing during which people spoke both for and against the bill. The tax cut will reduce revenues to the Education Trust Fund (ETF), which supports public schools, by an estimated $300 million a year when fully implemented, according to the fiscal note from the Legislative Services Agency. That would be about 3% of the $10 billion the ETF received last fiscal year.

Several people representing educational organizations urged legislators to reconsider the bill because of that and other legislation that will cut ETF revenues. They noted that Alabama, despite the tax on food, is a low tax state overall. And they said Alabama’s unusual budget surplus this year is partly the result of billions in federal dollars Congress has sent to the state the last couple of years in response to the COVID-19 epidemic.

“I just ask you to be very cautious as you proceed to look at cuts to the ETF long-term when we’re looking at a temporary economy,” said Ryan Hollingsworth, executive director of State Superintendents of Alabama.

Alabama Arise has advocated for a full repeal of the 4% tax on food along with legislation to replace the lost revenue, such as by repealing the state income tax deduction for federal taxes paid. Although HB479 does not fully repeal the tax and does not replace the revenue, Alabama Arise Executive Director Robyn Hyden said it was an important step to help low-income families.

“While we’re not thrilled that this proposal does not immediately replace revenue, we’ve spoken about that before, we think the time is right to take this step now, while we have funds available,” Hyden told the committee. “We would love for you all to come back in future years to find ways to safeguard ETF revenues and replaces the revenue losses so we can fully untax 4% of the state grocery tax.”

A representative of the Alabama League of Municipalities said cities are concerned that the bill prohibits cities and counties from raising their sales tax on food above the level at the time the bill goes into effect.

This story will be updated.

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