HB131 Alabama 2020 Session

Summary

Primary Sponsor

Andrew SorrellAuditor

Republican

Session

Regular Session 2020

Title

State sales and use tax increased, phase-in period, sales and use tax on food phased out, exempt by 2007, counties and municipalities prohibited from increasing sales tax on food, Secs. 40-23-2, 40-23-61 am'd.

Summary

HB 131 would gradually cut the state sales and use tax on food until food becomes tax-exempt in 2040.

What This Bill Does

Starting September 1, 2021, the state tax on food would be reduced by 0.2 percentage points per year according to a 20-step schedule, moving from 3.8% down through smaller rates until a 0% rate in 2040. For taxable periods beginning September 1, 2040, the gross receipts from the sale or use of food would be exempt from state sales and use taxes. The bill defines 'food' using the SNAP program definition (7 U.S.C. §2011 et seq.) and allows a general-law definition if SNAP ends; it also applies the state tax to gross receipts from food as defined.

Who It Affects

• Food buyers in Alabama will pay progressively less state sales tax on food over time, eventually paying no state tax after 2040.
• Food retailers/sellers will collect and remit the tax amounts as they are reduced over the years, and the state’s tax revenue from food sales is expected to decline accordingly.

Key Provisions

• The state sales and use tax rate on food will decrease in 20 steps: 3.8% (2021), 3.6% (2022), 3.4% (2023), 3.2% (2024), 3.0% (2025), 2.8% (2026), 2.6% (2027), 2.4% (2028), 2.2% (2029), 2.0% (2030), 1.8% (2031), 1.6% (2032), 1.4% (2033), 1.2% (2034), 1.0% (2035), 0.8% (2036), 0.6% (2037), 0.4% (2038), 0.2% (2039), with 0% (exemption) starting September 1, 2040.
• Food is defined as food under the SNAP program for purposes of the tax, with a fallback to a new definition by general law if SNAP ends.
• The act becomes effective on the first day of the third month after its passage and governor's approval (or otherwise becoming law).

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation