SB227 Alabama 2017 Session

Summary

Primary Sponsor

Gerald O. Dial

Republican

Session

Regular Session 2017

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

SB227 would raise Alabama's general sales tax in two steps and phase out the tax on food, ending with a full exemption by 2018.

What This Bill Does

It increases the state general sales tax rate to 4.35% on September 1, 2017 and to 4.70% on September 1, 2018. It also phases out the tax on food over two years by reducing the food tax to 2% in 2017 and then exempting food entirely from state sales and use taxes beginning September 1, 2018. The bill would adjust various tax subcategories to match the new rates and requires a 2019 review to ensure the changes are revenue-neutral. It becomes effective on the first day of the third month after the bill is enacted.

Who It Affects

• General shoppers who buy non-food taxable goods would face higher state sales taxes (4.35% in 2017 and 4.70% in 2018).
• Food purchasers would see a reduced tax burden in 2017 (2% of gross receipts) and would pay no state sales or use tax on food starting in 2018.

Key Provisions

• General rate schedule: the state sales and use tax rate would be 4.35% beginning September 1, 2017, and 4.70% beginning September 1, 2018, for most taxable transactions.
• Food tax phase-out: the state tax on food would be 2% beginning September 1, 2017, and would be exempt from state sales and use taxes beginning September 1, 2018.
• Effective date and revenue review: the act would take effect on the first day of the third month after passage, and the Legislature would review the results in 2019 to make adjustments to ensure revenue neutrality.

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