SB177 Alabama 2023 Session

Summary

Primary Sponsor

Arthur Orr Senator

Republican

Session

Regular Session 2023

Title

Relating to sales taxes; to amend Section 40-23-1, as last amended by Acts 2022-199 and 2022-291, 2022 Regular Session, Code of Alabama 1975, Section 40-23-2, as last amended by Act 2022-346, 2022 Regular Session, Code of Alabama 1975, Section 40-23-60, as last amended by Act 2022-199, 2022 Regular Session, Code of Alabama 1975, and Section 40-23-61, Code of Alabama 1975; to define "food" and begin phasing-out the state sales and use tax on food on September 1, 2023; to require certain growth targets in the Education Trust Fund for future sales tax reductions on food; to establish the sales and use tax rate on food for purposes of county and municipal sales and use taxes as the existing general or retail sales and use tax rate; and to authorize a county and municipality to reduce the sales and use tax rate or exempt food from local sales and use taxes.

Description

Under existing law, the state imposes sales or use taxes upon certain persons, firms, or corporations.

Sales of certain items are taxed at a reduced rate.

"Food" is not a defined term and is taxed at the general rate. Sales of other items are exempt from the taxes.

This bill would define "food" for purposes of sales and use taxes and begin phasing-out the state sales and use tax on food on September 1, 2023. Future rate reductions would be contingent upon certain growth requirements in the Education Trust Fund.

This bill would establish the sales and use tax rate on food for purposes of county and municipal sales and use taxes as the existing general or retail sales tax rate on the effective date of this act and allow a county and municipal election to reduce the sales tax rate or exempt food from local sales and use taxes.

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