The Alabama Legislature unanimously passed a new bill that will reduce the grocery tax in the state from 4% to 3%. The legislation, which garnered support from representatives and senators in both parties, is set to take effect Sept. 1.

According to Cliff McCullen, director of constituent services at Baldwin County legislative delegation, the bill's widespread backing is a rare occurrence in politics.

"The bill had overwhelming support from representatives and senators in both parties." McCullen said. "Every single member of the legislature signed on."

While the tax reduction will bring down the state tax rate, it is important to note that certain counties and cities will continue to levy their own sales taxes. Sales tax rates vary across municipalities, meaning shoppers should expect to pay taxes according to the specific rates in the areas where they make purchases.

In an effort to further provide relief to residents, the legislature included a provision in the bill that states the grocery tax will be lowered from 3% to 2% in 2024 if there is a demonstrable increase in funds within the education trust fund. For this reduction to take effect, the growth of funds inside the education trust fund needs to reach a minimum of 3%.

This legislative decision aims to alleviate the financial burden on Alabama residents and promote economic stability. While the grocery tax reduction will lead to lower bills for consumers statewide, individuals should still be prepared to pay sales taxes according to the rates imposed by their respective cities or counties.

The Alabama Legislature also voted on a bill that seeks to eliminate state income tax on overtime pay. Spearheaded by House Minority Leader Anthony Daniels (D), the bipartisan legislation garnered support from a majority of members and aims to provide financial relief for workers who put in additional hours.

Gov. Kay Ivey successfully amended the bill and removed the overtime cap before both houses of the Alabama Legislature concurred on the amendment.
The bill ensures that Alabamians will no longer be subject to income tax on the additional wages earned through overtime work. Moreover, the removal of the overtime cap guarantees that hard-working individuals can earn as much as they deserve, without any restrictions imposed by the state.

"By eliminating the income tax on overtime pay and by working to significantly lower the grocery tax, the Alabama Legislature has worked hard to get our citizens hard-earned money back into their wallets," Rep. Matt Simpson (R-Daphne) said. "With the rising inflation we've seen, with the costs of goods continuing to go higher and higher, every dollar that we can give back to our hard-working families is definitely a win."