Ivey signs grocery tax reduction into law; tax to drop by 1% in September

Last month Alabama Gov. Kay Ivey signed legislation to reduce Alabama’s sales tax on groceries.

The tax cut will reduce the state’s 4% tax on groceries to 3% on Sept. 1. The tax will drop to 2% on Sept. 1, 2024, but only if tax collections to the Education Trust Fund rise at least 3.5% to offset the loss. If that growth requirement isn’t met, the tax would be reduced to 2% in the next year that the growth requirement is satisfied.

“As Alabamians and Americans alike are grappling with tighter times, I am hopeful that this decision by the Legislature to slightly reduce the sales tax on certain food items will be truly felt by Alabama families,” Ivey said in a statement.