HB647 Would End AL State Sales Tax on Food by 2029
Written by Brent Wilson on
April 1, 2026
HB647 would phase out Alabama’s state sales tax on food over the next several years and fully exempt food from the state tax beginning Sept. 1, 2029.
The bill, sponsored by Rep. Mike Shaw, R-Hoover, was introduced March 31 and sent to the House Ways and Means Education Committee. Under the proposal, counties and municipalities also could choose to exempt food from their own local sales and use taxes starting Sept. 1, 2029.
Alabama law now taxes most sales at a general state rate of 4%, while food is taxed at a lower rate. Shaw’s bill lays out a step-by-step reduction for the food tax before the full exemption takes effect.
Under that schedule, the food tax would be set at 2% on Sept. 1, 2025, then fall to 1.5% on Sept. 1, 2026, 1% on Sept. 1, 2027, and 0.5% on Sept. 1, 2028. Food would become fully exempt from state sales and use tax on Sept. 1, 2029.
The bill’s effective date is Sept. 1, 2026. Retailers that collect sales taxes would have to apply each rate change as it takes effect under the schedule in the bill.
For shoppers, the proposal would gradually lower the state tax added to grocery purchases and eventually remove that state tax entirely. Sales and use taxes apply to purchases of goods, and the use tax generally covers items bought for use in Alabama when sales tax was not collected at the time of purchase.
Local governments would not be required to match the state’s approach. Shaw’s bill would give counties and cities the authority to adopt their own exemptions for food beginning in 2029, which means local officials could weigh the tradeoff between lower grocery taxes and the revenue those taxes bring in for local services.
Food tax proposals have become a regular part of Alabama’s tax policy debate because groceries are a routine household expense and the tax applies regardless of income. A phased approach spreads the change over multiple years rather than making the full revenue reduction at once.
Legislatively, the next step is committee review in the House. If committee members approve the bill, it would go to the full House for debate and a vote, then move to the Senate if it passes. Any version approved by both chambers would go to the governor.
