Grocery Tax Cut and Rebate Checks Coming to Alabama in 2023

The grocery tax in Alabama has been reduced, but residents will barely notice a small difference at the register.
The reason for this is that local sales taxes will still apply to food items even though the Act only lowers the state tax by 1% for 2023.
Gov. Kay Ivey expressed her hope that the choice made by the Legislature to slightly decrease the sales tax on specific food products will be truly felt by Alabama families when the legislation for the tax reduction has been approved early this summer.
The state’s share of the grocery tax may be further reduced the next year, but it is not a given.
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Alabama Grocery Tax Cut Takes Effect, But Not All Food Items Are Exempt

Through August 2024, the new law lowers the tax on some food items to 3%. This implies that for every $100 spent on groceries, consumers may save $1. However, not all products are eligible for the grocery tax break. These products are still subject to 4% tax:
Any prepared meal (for instance, reheated pizza slices)
Pets’ food
Supplements and vitamins
Household products (include toilet paper and detergent)
Items for personal care (like shampoo)
Groceries in Alabama are still subject to the applicable state and local taxes, which in some sections of the state can be as high as 7.5%.
In September 2024, there may be a further reduction in the grocery tax in Alabama. If passed, the grocery tax would be reduced by an additional 1%, bringing the state’s food sales tax to 2%. The further grocery tax cut will not take effect until the fund increases by at least 3.5% from the prior fiscal year.
Shoppers will continue to pay local taxes on food goods even if the extra Alabama grocery tax drop goes into effect in 2024. Even with a 2% state grocery tax.
$9.50 for each $100 spent on groceries.
Every $1,000 spent on groceries, $95 is spent.
Alabamans in less taxed areas will pay less in sales tax on groceries, but if the further tax cut isn’t passed in 2024, it won’t take effect.
Alabama to Provide Tax Relief to Residents
Although the reduced grocery tax in Alabama may only offer a small amount of relief to citizens, additional relief is soon to come for many Alabama taxpayers.
Checks for up to $300 in income tax rebates (or $150 for single filers) will start to be sent to eligible Alabamans later this fall. Taxpayers must fulfill the following requirements in order to be eligible for the Alabama rebate check:
For the tax year 2021, you must have submitted a personal Alabama income tax return.
For the 2021 tax year, you were not allowed to be included as a dependent on a tax return.
A tax relief check is not available to estates or trusts.
If you owe a rebate payment, a deposit could arrive in your account as soon as November 30, 2023.
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Source: Newsbreak