Alabama 2025 Regular Session

Alabama House Bill HB387 Compare Versions

Only one version of the bill is available at this time.

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1	1	HB387INTRODUCED
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3	3	HB387
4	4	RBBUTMN-1
5	5	By Representatives Garrett, Stadthagen, Colvin, Kiel
6	6	RFD: Ways and Means Education
7	7	First Read: 05-Mar-25
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12	12	5 RBBUTMN-1 02/26/2025 KHF (F)KHF 2025-1039
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14	14	First Read: 05-Mar-25
15	15	SYNOPSIS:
16	16	Under existing law, the state imposes sales or
17	17	use taxes upon certain persons, firms, or corporations
18	18	at a general rate of four percent. Sales of certain
19	19	items are taxed at a reduced rate, including food,
20	20	which is taxed at three percent by the state. The
21	21	definition of "food" for state sales and use taxes is
22	22	applicable to county and municipal sales and use taxes
23	23	and county and municipal governments may reduce their
24	24	sales and use tax rate on food by 25 percent in any
25	25	year in which certain growth targets are met.
26	26	This bill would revise the provisions
27	27	authorizing a county or municipal governing body to
28	28	reduce their sales and use tax on food to eliminate the
29	29	25 percent limitation on the rate cut and remove the
30	30	growth requirement.
31	31	A BILL
32	32	TO BE ENTITLED
33	33	AN ACT
34	34	Relating to sales taxes; to amend Section 40-23-40,
35	35	Code of Alabama 1975, to revise the provisions authorizing a
36	36	county or municipal governing body to reduce their sales and
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66	66	county or municipal governing body to reduce their sales and
67	67	use tax on food to eliminate the restriction on the amount of
68	68	rate cut and remove the growth requirement.
69	69	BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
70	70	Section 1. Section 40-23-40, Code of Alabama 1975, is
71	71	hereby amended as follows:
72	72	"§40-23-40
73	73	(a) On June 15, 2023, the definition of "food" in
74	74	Sections 40-23-1 and 40-23-60 , shall apply to county and
75	75	municipal sales and use taxes. For purposes of county and
76	76	municipal sales and use taxes, the sales tax rate on food
77	77	shall be established as the general or retail sales tax rate
78	78	in effect in the county or municipality on June 15, 2023,
79	79	unless otherwise provided by law. An act of the Legislature or
80	80	an ordinance or resolution adopted by a county or municipal
81	81	governing body levying a county or municipal sales and use tax
82	82	inclusive of food passed or enacted on or before June 15,
83	83	2023, shall remain operative, but no additional county or
84	84	municipal sales and use taxes on food may be levied.
85	85	(b) Any county or municipal governing body, by
86	86	resolution or ordinance, may reduce the general or retail
87	87	sales tax rate on food for local sales and use taxes by 25
88	88	percent in any year in which the growth in the applicable
89	89	municipal or county general fund exceeds two percent over the
90	90	prior year. The ordinance or resolution must be adopted at
91	91	least 60 days prior to becoming effective and will take effect
92	92	on October 1 following adoption.
93	93	(c) A county or municipal governing body that reduces
94	94	its general or retail sales tax rate on food for local sales
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124	124	its general or retail sales tax rate on food for local sales
125	125	and use taxes pursuant to this section may subsequently
126	126	increase the rate on food not to exceed the rate in effect in
127	127	the county or municipality on June 15, 2023, unless otherwise
128	128	provided by law.
129	129	Section 2. This act shall become effective on June 1,
130	130	2025.
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