SB390 Alabama 2018 Session

Summary

Primary Sponsor

Hank Sanders

Democrat

Session

Regular Session 2018

Title

State income tax, federal deduction limited for individual taxpayers, state sales tax on food and over-the-counter drugs removed, Amendment 225 (Section 211.04, Recompiled Constitution of Alabama of 1901, as amended), repealed, const. amend.

Summary

SB 390 would repeal Amendment 225 and implement tax changes that cap the state deduction for federal taxes, exempt food and over-the-counter drugs from state sales tax, and ban local governments from levying separate taxes on those items.

What This Bill Does

It repeals Amendment 225. It creates a state income tax deduction for federal taxes paid or accrued, with income-based limits and a phase-down for higher incomes starting after 2018. It exempted food and over-the-counter drugs from state sales tax starting January 1, 2019, while local governments keep their share of sales tax but cannot impose a separate tax solely on food or OTC drugs. It defines food using the SNAP definition and OTC drugs by FDA labeling, and if SNAP’s definition changes, the Legislature may define food by general law.

Who It Affects

• Individual taxpayers in Alabama, who would have a capped federal tax deduction on their state income tax return depending on filing status and income.
• Consumers buying food and over-the-counter drugs, who would pay no state sales tax on those items (though local taxes may still apply as part of the local rate).
• Local governments and tax authorities, which would be prohibited from imposing separate sales taxes specifically on food or OTC drugs.
• Retailers and sellers of food and OTC drugs, who must comply with the new exemption and definitions.

Key Provisions

• Repeal Amendment 225 (Section 211.04 of the Constitution).
• For tax years after December 31, 2018, allow federal income taxes paid or accrued to be deducted on individual Alabama income tax returns with specific limits by filing status and income level.
• If adjusted gross income is at or below $100,000 (single/HOH/Sep) or $200,000 (Married filing jointly), deduct all federal income taxes paid or accrued; above these thresholds, deduction decreases by 1% of federal taxes for each $500 of excess AGI (individuals) or $1,000 for joint filers.
• Starting January 1, 2019, exempt the sale of food and over-the-counter drugs from state sales tax; local governments may continue to tax at the local rate but cannot impose a separate tax only on food or OTC drugs.
• Define 'food' using the SNAP definition; define 'over-the-counter drugs' by FDA labeling; exclude grooming/hygiene products; if SNAP definition changes, the Legislature may redefine 'food' by general law.
• Election required for voter approval of the constitutional amendment.

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

Subjects

Constitutional Amendments