Bill to remove state sales tax from food fails
Published 10:24 am Wednesday, March 25, 2009
MONTGOMERY — An effort to remove the state’s 4-cent sales tax from groceries failed Tuesday in the Alabama House.
A vote to bring the proposed constitutional amendment up for debate failed. The House voted 56-42 for the bill, but that was short of the 59 votes needed to bring it up for debate in the 104-member House.
The sponsor, Rep. John Knight, D-Montgomery, promised to continue to push for passage of the amendment, which if it passed the Legislature would have to be approved in a statewide vote.
The vote in the House fell along party lines, with Democrats supporting it and Republicans opposing it. Democratic Rep. Richard Laird of Roanoke voted against the bill and was the only House member to cross party lines.
The bill would replace the lost income by removing the current deduction for federal income taxes paid from higher-income taxpayers. Republicans opposed that part of the bill, saying it would amount to a tax increase for some taxpayers.
Knight urged passage of the measure, saying it was not morally right to tax necessities of life such as food.
“This is giving the people a chance to vote on taking the sales tax off groceries. I trust the people of this state to do what’s right,” said Knight, chairman of the House General Fund budget committee.
Alabama and Mississippi are the only states that levy the full state sales tax on groceries. The other states either have no tax, a reduced tax, or a tax credit for low-income residents.
Alabama currently levies a 4 percent state tax on groceries, which produces about $400 million annually. Cities and counties also have taxes that would not be removed by the proposed amendment.
House Minority Leader Rep. Mike Hubbard, R-Auburn, said Republicans want to remove the sales tax on food, but don’t want to do it by raising taxes for one segment of the population. He called Knight’s bill “a shell game.”
Hubbard said the measure would hurt many small business owners who pay the income taxes for their businesses.
“Now is not the time to raise taxes on any segment of the work force,” Hubbard said.
The bill was opposed by some business groups, some of whom had lobbyists at the Statehouse Tuesday urging lawmakers to vote “no.”
House Majority Leader Rep. Ken Guin, D-Carbon Hill, urged House members to put aside differences and remove the tax from food.
“Look into your hearts and consider the least of these,” Guin said.
Rep. Paul DeMarco, R-Homewood, said he plans to introduce a bill that he hopes might serve as a compromise.
It is based on a plan used in Idaho where food is taxed, but some taxpayers, based on income, are offered a tax credit for groceries purchased.