In the News
Panel OKs end to grocery tax
April 24, 2008
Associate Press, Rawls, 04/23/08
A proposed constitutional amendment to remove the state sales tax from groceries has one more legislative hurdle to clear.
The Senate Finance and Taxation Committee voted 7-0 Tuesday to approve the proposed amendment, which passed the House on April 15. The proposal now goes to the Senate for a vote. If approved by the Senate, it will go on the general election ballot Nov. 4 to see if a majority of voters statewide will put it into the Alabama Constitution.
The bill's sponsor, Rep. John Knight, D-Montgomery, called the committee's vote an important step "toward tax fairness."
The legislation would remove the state's 4 percent sales tax on groceries and would raise the threshold where families start paying the state income tax, two key initiatives to help low-income workers. To replace the lost revenue, it would repeal the state's income tax deduction for federal taxes paid.
The Legislative Fiscal Office estimates that higher-income families will pay more in taxes while lower-income families will pay less.
The fiscal experts say the break-even point, using adjusted gross income for people who take the standard deduction, is $39,200 for a single person, $66,100 for a single parent with one child, $80,300 for a single parent with two children, $78,600 for a married couple with no children, $94,700 for a married couple with one child, and $110,500 for a married couple with two children.
Knight and Senate President Pro Tem Hinton Mitchem, D-Albertville, said they are optimistic the Senate will approve the measure and send it to a statewide vote.
"It's going to be a very popular bill in the Senate because it is going to help a lot of low-income people," Mitchem said.
Gov. Bob Riley said Tuesday he opposes the measure because about 30 percent of Alabama's families would pay more taxes.
Opponents say Riley's estimate is too high.
Voting for the proposed constitutional amendment in committee were Sens. Bobby Denton, D-Muscle Shoals; Vivian Davis Figures, D-Mobile; Zeb Little, D-Cullman; Larry Means, D-Attalla; Wendell Mitchell, D-Luverne; Quinton Ross, D-Montgomery; and Hank Sanders, D-Selma.
Sen. Tom Butler, D-Madison, abstained. He said the bill has a cloud over it because when it narrowly passed the House last week, some proponents pushed the voting machines of some members who were absent.
Knight said he's not concerned because the House followed its normal voting rules.
Alabama and Mississippi are the only states that don't remove all or part of their state sales tax from food or that don't have a tax rebate for food purchases by the poor.
Alabama, Iowa and Louisiana are the only states that allow citizens to deduct their federal income taxes from their state taxes.
