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Alabama sales tax reduction

The US State of Alabama has reduced sales tax on grocery items to 3%, down 1% from 4%.  Wider societal factors in the US State served as pressure for local legislators to instigate the change. The sales tax adjustment also brings Alabama in line with most of the other US States, which adopt a separate sales tax for groceries specifically.

Alabama legislators had initially resisted the change, owing to the purported impact on Education Trust Fund collections, but legislators have now overridden these concerns and authorised the sales tax reduction.

The revised sales tax will take effect from 1 September 2023.

A further decrease to the sales tax in Alabama is expected from 1 September 2024, to 2%, but this is largely dependent on tax collections to the Education Trust fund, which will need to offset sales tax revenue.

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