HB305 Alabama 2016 Session

Summary

Primary Sponsor

John F. Knight Jr

Democrat

Session

Regular Session 2016

Title

Sales and use tax on food, phase out over a four-year period

Summary

HB305 would gradually end Alabama's state sales and use tax on food over four years, culminating in a full exemption in 2019.

What This Bill Does

The bill reduces the state tax on food each year: 3% starting September 1, 2016, then 2% in 2017, 1% in 2018, and a full exemption in 2019. Local food taxes are not changed by this bill, and local governments would continue to collect their existing local taxes on food. The definition of food used for tax purposes follows federal SNAP definitions, with a fallback to a general-law definition if SNAP changes; this ensures a consistent definition for applying the tax changes.

Who It Affects

• Households and individuals who purchase food, who would pay less state tax on those purchases each year and eventually pay none in 2019.
• Retailers and other sellers of food, who would adjust their tax collection and remittance as the rate decreases and eventually becomes zero.
• Local governments, which would continue to collect their own local food taxes at the current local rate (unchanged by this bill).
• State government budget and revenues, which would see state tax revenue from food decline as the rate is phased out and finally eliminated.

Key Provisions

• The state sales and use tax rate on food is reduced by one percentage point per year beginning September 1, 2016.
• Rate schedule: 3% (2016 onward), 2% (2017 onward), 1% (2018 onward), and 0% (exemption) beginning September 1, 2019.
• Beginning September 1, 2019, food sales and use are exempt from state taxes (local taxes excluded).
• Local food taxes are not affected; local governments continue to collect the local portion of the food tax at the existing rate, and the provisions do not alter local tax collections.

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