AL
Alabama House Bill HB396

Alabama 2023 Regular Session

Alabama House Bill HB396

Introduced
4/27/23  

Caption

To amend Sections 40-23-1 and 40-23-4, as last amended by Act 2022-291, Act 2022-293, Act 2022-373, and Act 2022-199, 2022 Regular Session, Code of Alabama 1975, related to sales taxes; to define food and exempt sales of food from state sales and use taxes; to establish the local sales tax rate on food for purposes of county and municipal sales and use taxes as the existing general or retail local sales tax rate; and to allow a local governing body to reduce the local sales tax rate or exempt food from local sales and use taxes.

Impact

Should HB396 pass, it will significantly influence state revenue from sales tax, particularly from food, as it eliminates the state sales tax on food purchases. Additionally, the bill sets the local sales tax rate on food at existing rates, but allows local governments the authority to adjust these rates or opt for an exemption. Local governing bodies will have the discretion to either maintain the current tax structure or provide further tax relief to consumers by adjusting local food tax rates.

Summary

House Bill 396 proposes to amend Alabama's sales tax laws by defining 'food' and exempting food sales from state sales and use taxes starting September 1, 2024. This bill aims to clarify what constitutes food under state law, aligning with federal definitions used in the Supplemental Nutrition Assistance Program (SNAP). The exemption is intended to alleviate some tax burdens on consumers while promoting affordability and access to food across the state.

Contention

Opposition to the bill may arise from concerns regarding the financial implications for state and local revenue, particularly in areas reliant on sales taxes for funding public services. Critics might argue that losing sales tax from food could lead to budget shortfalls, negatively impacting essential services, while supporters contend that the bill would ultimately support low-income residents and boost local economies by increasing food affordability. Overall, discussions around HB396 are likely to focus on balancing the economic benefits of the proposed tax exemption against the potential risks to state and local revenues.

Companion Bills

No companion bills found.

Previously Filed As

AL HB427

Sales and use taxes; rate on food eliminated effective September 1, 2025

AL HB386

Sales and use tax on food, state rate reduced, counties and municipalities authorized to reduce

AL SB125

Taxation; Alabama Wildlife Center, extend the exemption from state, county, and municipal sales and use taxes

AL HB546

Taxation; to exempt the Alabama Gulf Coast Zoo from the payment of sales and use taxes.

AL HB387

Sales tax on food, limit on local rate reduction and growth requirement removed

AL HB286

Junior Achievement of Alabama, Inc., exempt from state, county, and municipal ad valorem taxes, and sales and use taxes

AL HB47

Alabama State Missionary Baptist Convention, Inc., exempt from state, county, and municipal sales and use taxes.

AL HB205

Sales and use taxes, technical edits to align exemptions

AL HB577

Relating to taxation; to exempt the Alabama Eye Bank from sales and use taxes

AL SB126

Taxation; Alabama Audubon, exempt from state, county, and municipal sales and use taxes

Similar Bills

AL HB10

Taxation, commercial fishing, ad valorem tax exemption for vessels and equipment, sales and use taxes exemption for bait, levy of excise tax at a rate differential of one and one-half percent on purchase and storage of vessels and machinery used for commercial fishing, Secs. 40-9-1, 40-23-1, 40-23-4, 40-23-37, 40-23-60, 40-23-63 am'd.

AL SB274

Sales and use tax, agricultural products, producer value added agricultural products exempt from sales tax, Sec. 40-23-1, 40-23-4 am'd.

AL HB15

Taxation, sales tax exemptions, sales and use tax exemption with local option provided for purchases of optical aids, including eyeglasses and contact lenses.

AL HB176

Taxation, sales tax exemptions, sales and use tax exemption with local option provided for purchases of optical aids, including eyeglasses and contact lenses

AL HB74

Taxation, sales tax exemptions, sales and use tax exemption provided for purchases of optical aids, including eyeglasses and contact lenses

AL HB282

Taxation, sales tax exemptions, sales and use tax exemption provided for purchases of optical aids, including eyeglasses and contact lenses.

AL HB412

Sales and use tax, agricultural products, producer value added agricultural products exempt from sales tax, Sec. 40-23-1, 40-23-4 am'd.

AL HB479

Relating to sales and use taxes; to amend Sections 40-23-1, 40-23-2, 40-23-60, and 40-23-61, Code of Alabama 1975, to define "food" and begin reducing 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 provide for the levy of sales and use tax on food by counties and municipalities.