A Sales Tax on Food

Alabama is one of the few states that charge a tax on the stuff we eat.

IMG_0027Stateline, an online site of The Pew Charitable Trusts, focuses on Alabama in a story about the handful of states that charge the same sales tax on food as everything else:

“Alabama, Hawaii, Idaho, Kansas, Mississippi, Oklahoma and South Dakota tax groceries at the same rate as the sales tax on all purchases, according to the Tax Foundation. Arkansas, Illinois, Missouri, Tennessee, Virginia and Utah tax food at a lower rate. Seven fewer states tax groceries than in 1998, when researchers at the Center for Budget and Policy Priorities found that 20 did. But the trend to eliminate the tax has stalled.”

Residents of Montgomery pay the same 10% tax on groceries that they pay on everything else they buy. It is a regressive tax because it has a disproportionate impact on poor people, who spend a larger percentage of their income on food.

There have been legislative efforts for years to reduce the tax on food, but Alabama’s overall tax rate is so low it can’t afford to eliminate the sales tax on food without replacing it with tax income from another source. And there has never been agreement on where that money should come from.

Read the entire Stateline report HERE.

Categories: News, Statewide