SB272 Alabama 2016 Session

Summary

Primary Sponsor

Gerald O. Dial

Republican

Session

Regular Session 2016

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

SB272 would raise Alabama's general sales tax rate to 4.5% in 2016 and 5% in 2017 while phasing out the sales tax on food by 2017, aiming to keep overall revenue roughly the same.

What This Bill Does

It increases the state’s general sales tax rate to 4.5% starting September 1, 2016 and to 5% starting September 1, 2017. It also phases out the state tax on food: a 2% tax on food would apply in 2016, and food would be exempt from state sales and use taxes beginning September 1, 2017. The bill defines food by federal SNAP terms and allows a new definition if SNAP changes. It requires the Legislature to review the act in 2018 to ensure revenue neutrality and sets an effective date a few months after passage.

Who It Affects

• Consumers/households: Non-food purchases would become more expensive due to higher general rates (4.5% then 5%), while food purchases would be taxed at 2% in 2016 and then become completely tax-exempt in 2017.
• Retailers and businesses: They would collect higher state sales taxes in 2016 and 2017 and adjust systems for the transition to food tax exemption in 2017, plus comply with the definition of food and related reporting.

Key Provisions

• Provision 1: The state general sales tax rate would rise to 4.5% on Sept 1, 2016 and to 5% on Sept 1, 2017, with the 2018 regular session reviewing results to keep the act revenue neutral.
• Provision 2: The tax on food would be set at 2% starting Sept 1, 2016 and would be completely exempt from state sales and use taxes beginning Sept 1, 2017; 'FOOD' is defined by federal SNAP terms, with a general-law fallback if SNAP definitions change.

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