Alabama took a step toward lower grocery taxes and a higher threshold for income tax Wednesday when legislative committees approved HB 274 and SB 431, the Tax Fairness Amendment of 2008. The House Education Appropriations Committee gave the plan a favorable report by voice vote.
Meanwhile, the vote in the Senate Finance and Taxation – Education Committee was 15-1. The bills, sponsored by Rep. John Knight, D-Montgomery, and Sen. Hank Sanders, D-Selma, respectively, now move to the full chambers for consideration. If both the House and Senate approve the amendment by a three-fifths vote, Alabamians will vote on the measure in November.
At the heart of the Tax Fairness Amendment is the repeal of the 4 percent state sales tax on groceries. Alabama is one of only two states – the other is Mississippi – to tax groceries fully with no discount or rebate. For a family of four with a $200 weekly food bill, the tax cut would represent a savings of more than $400 a year at the grocery store.
The Alabama Grocers Association has endorsed the proposal. “As grocers, we see day to day the struggles families have paying for necessities such as groceries and want to do something to help our customers,” said Greg Gregerson, chairman of the association’s legislative committee. Grocery stores across the state will post signs in the coming weeks to educate shoppers about the plan and urge them to ask their legislators to support it.
The amendment also would raise the state’s income tax threshold for a family of four from $12,600 to $20,000 a year by increasing standard deductions and personal exemptions. And it would end the state’s full deduction for federal income taxes, which is worth thousands of dollars for the highest earners but less than $100 for most people who make under $100,000. Ending this deduction would allow the measure to be revenue-neutral, meaning the bill would neither increase nor decrease revenues for the state’s education budget.
The committees’ actions are promising, Alabama Arise state coordinator Kimble Forrister said, and a strong core of support for the measure exists in both chambers. But he cautioned that the next step will be a challenge.
“In lining up commitments for a floor vote, the closer you get to a majority, the harder you have to work,” Forrister said. “We’re excited to get the committees’ endorsements. The committee debate highlighted both the growing support for modernizing the tax structure and a lingering reluctance to correct the imbalance. We hope this will be the year the people of Alabama get a chance to vote for tax fairness.”
ACTION ITEM:
Get your legislator on board!
Call or write your House and Senate members and urge them to support HB 274 and SB 431. Then let us know what they say!
