MONTGOMERY, Ala. — Alabama is about to give shoppers a two-month break on the state’s grocery tax, suspending the 2% state sales tax on qualifying food items from May 1 through June 30. The move will not eliminate all grocery taxes, as city and county sales taxes will still apply, and the change is likely to be felt as modest relief rather than a major reset at checkout.
Under Act 2026-604, the state portion of sales and use tax on food will be suspended for two months. The Alabama Department of Revenue says retailers still must report gross sales of qualifying food items and then deduct those sales when calculating state tax, while local tax reporting continues as usual. The temporary break applies to SNAP-eligible food items, generally groceries intended for home consumption, while alcohol, tobacco, hot prepared foods and foods ready for immediate consumption are excluded.
The state grocery tax is only one piece of the final bill. Local sales taxes in Alabama can still be charged on groceries, and those rates vary by city and county, so the savings will differ depending on where a shopper lives. There is no federal grocery sales tax, so this is a state-and-local issue. For many households, the practical effect will be a small reduction on the grocery receipt, not a full exemption from food taxes.
Alabama has been reducing its grocery tax in stages, cutting the tax from 4% to 3% in 2023 and then from 3% to 2% in 2025, according to the Alabama Policy Institute and AARP. This latest action is only temporary, unlike the earlier reductions. It comes after continued political pressure over food inflation and the long-running criticism that Alabama was taxing a basic necessity more heavily than most states.
Most states do not tax groceries at the same level Alabama has historically used, and many exempt food entirely or tax it at a reduced rate. AARP lists Alabama among the small number of states that still tax groceries, even after the recent cuts. That makes Alabama an outlier in the national landscape, as the broader trend across the country has been to reduce or eliminate grocery taxes as lawmakers respond to household budgets strained by higher food prices.
Supporters of the break frame it as overdue relief for families facing higher grocery bills, while critics of Alabama’s tax structure argue the state has leaned too heavily on regressive taxes that hit lower-income households hardest. The current change was enacted by Republican lawmakers and signed by Gov. Kay Ivey. The policy does not solve the larger cost-of-living problem; it only trims the state’s share for two months. In practical terms, it is a small correction against a much bigger affordability squeeze at the supermarket.