Lawmakers:Grocery tax ban is OK

Published 9:23 pm Saturday, November 29, 2008

Alabama House Democrats will introduce a ban on the grocery tax once again, and local legislators said they like the idea.

Last year, a ban on Alabama’s 4 percent grocery tax passed the House of Representative but failed in the Senate.

Now, Democrats plan to bring up the proposal in the next legislative session.

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Local legislators Rep. Alan Boothe (D-Troy) and Sen. Wendall Mitchell (D-Luverne) said they are in favor of banning the grocery sales tax — it’s making up the difference that poses a problem.

“I’m all for reducing the tax on groceries,” Boothe said. “I’m not so sure how we’re going to make up the difference in the budget.”

The grocery sales tax generates around $320 million for the state, but the bill plans to compensate by removing some of the state income tax deduction that Alabama taxpayers get for their federal income taxes.

The total tax deduction is worth $550 million a year.

However, Mitchell voted against this plan last year.

“I voted against that part of it,” Mitchell said. “They were trying to remove the exemption on federal income tax on the state return, and that’s a hidden tax on people. The break we all get on our state returns by subtracting the federal income tax we pay is significant.”

But, Mitchell said he is willing to explore options to find a way to allow the bill to pass.

“I think it’s a fair thing to do,” Mitchell said. “Several states across the country have never had a sales tax on food just because it’s a necessity for people.”

Gov. Bob Riley said in a news conference last week he has another plan for making up the more than $300 million that would be lost by banning grocery tax.

Boothe and Mitchell are hoping for some kind of compromise.

“We’re going to have to look at both sides and see what’s best for the people I represent,” Boothe said.

Mitchell said timing, if anything, would be what likely hinders the bill from passing in a time where Alabama’s budget is facing severe shortages.

“If we pass a sales tax exemption bill we’re going to need to replace that money because we are in a deficit,” Mitchell said. “The timing for something like this is not good, and if it fails that will be the reason.”

*The Associated Press contributed to this report.