SB287 Alabama 2014 Session

Summary

Primary Sponsor

Gerald O. Dial

Republican

Session

Regular Session 2014

Title

State sales and use tax increased, phase-in period, sales and use tax on food phased out, exempt by 2017, counties and municipalities prohibited from increasing sales tax on food, Secs. 40-23-2, 40-23-61 am'd.

Summary

SB287 would raise Alabama's state sales tax rate through 2017 while phasing out the sales tax on food by 2017, including food sold in coin-operated machines, in a plan intended to be revenue-neutral.

What This Bill Does

It increases the general state sales tax rate in steps: 4.25% in 2014, 4.5% in 2015, 4.75% in 2016, and 5% in 2017. It phases out the sales tax on food over four years, reducing the food tax by 1 percentage point each year starting Sept 1, 2014 (3% in 2014, 2% in 2015, 1% in 2016, and exempt in 2017). It also phases out the tax on food sold through coin-operated vending machines over three years: 3% through Aug 31, 2015; 2% starting Sept 1, 2015; 1% starting Sept 1, 2016; and exempt starting Sept 1, 2017. The bill would take effect a few months after passage, and the Legislature would review the results in 2018 to ensure revenue neutrality.

Who It Affects

• Consumers and households in Alabama who buy goods and food; they would pay higher taxes on most items in the near term but would eventually see the food tax eliminated by 2017.
• Retailers, wholesalers, and other sellers in Alabama who collect and remit the sales tax; they would face higher rates initially and must adjust for the phased-out food tax and coin-operated machine tax, with broader budget implications for state funding.

Key Provisions

• General state sales/use tax rate increases: 4.25% (2014), 4.5% (2015), 4.75% (2016), and 5% (2017).
• Food tax phase-out: reduce the food sales/use tax rate by 1 percentage point each year beginning Sept 1, 2014, resulting in 3% (2014), 2% (2015), 1% (2016), and exemption (2017).
• Coin-operated vending machine food tax phase-out: 3% through Aug 31, 2015; 2% beginning Sept 1, 2015; 1% beginning Sept 1, 2016; exempt beginning Sept 1, 2017.
• Food purchases (including food sold through coin-operated machines) become exempt from state sales/use taxes starting Sept 1, 2017.
• Effective date: the act becomes law on the first day of the third month after approval by the Governor.
• Section 5 requires a 2018 Regular Session review to make adjustments to keep the provisions revenue-neutral.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation