A bill removing the 4 percent sales tax from groceries was passed in the Alabama House of Representatives last week and was approved by the Senate Finance and Taxation-Education Committee.
The proposed constitutional amendment passed 63-38 in the house, gaining the exact number of votes needed. It passed 7-0 in the senate committee.
“I think it’s a good piece of legislation,” said Sen. Ted Little, D-Lee, Russell and Tallapoosa. “If we can pass this legislation, the families of four who make under $150,000 a year, close to 80 percent of Alabama families, our fiscal notes lead us to believe they will pay less money than they will if they keep paying taxes on food.”
The bill has been controversial because the current revenue from grocery tax is earmarked for the State Education Trust Fund.
To recoup that money, Alabama citizens will no longer be able to deduct their federal or FICA taxes from state income tax returns.
“Alabama is one of only 3 states that still allows any citizens to do that,” Little said.
The bill must come up for debate in the Senate before the end of the session May 16, however it could come up for debate as soon as next week.
If the bill is passed in the Senate, it will be voted on by citizens in November.
Gov. Bob Riley has publicly opposed the bill, claiming 30 percent of Alabama citizens would pay more than they do on the current plan.
“Some people will vote for it even though it may cost them money, because it’s a proper move to help out lower income families,” Little said.
