Four bills that would save Alabama residents money when buying groceries or doing their taxes cleared the Alabama House of Representatives last week and now await Senate action to determine if they will become law.
HB386 and HB387 propose to reduce Alabama state sales tax on groceries and would give county and city governments legal authority to reduce their local sales taxes on food without restrictions.
Alabama's state sales tax on groceries is 3%, reduced last year from 4% by legislative action. HB386 would cut grocery taxes another 1%. The bill does not have a 'sunset' date, meaning it would be a permanent change if approved by the Alabama Senate.
House District 18 Rep. Jamie Kiel (R-Russellville) voted for both bills as he described a trend in Alabama politics toward reducing tax burdens on Alabamians, something he supports. Part of the bills' appeal is their applicability to most residents and not just a particular cross-section.
HB386 passed the House 103-0 and HB387's vote was 102-0.
Although on Spring Break vacation this week, the Alabama Legislature will return to session next week and the 2025 legislative session runs until May 15, 2025, the day of adjournment.
HB388 also cleared the House on October 18th. With Senate approval, this bill would double the Alabama state income tax exemption for retirees age 65 and older from $6,000 to $12,000 for individuals and from $12,000 to $24,000 for couples. It would take effect October 1, 2025.
HB388 passed the House 102-0.
A companion bill, HB389, would increase the optional standard deduction and increase the adjusted gross income range allowable for the maximum optional standard deduction and the dependent exemption to increase the threshold at which the State of Alabama imposes individual income taxes.
HB389 would impact Alabama residents making less than $120,000 a year.
For married taxpayers who file jointly, the standard deduction would increase from $8,500 to $9,500 and would apply to incomes less than $28,000, an increase from the current $25,000 limit.
For dependents of married couples, if their income is less than $60,000, they could now deduct up to $1,000. Current law includes a maximum income of $50,000. For dependents earning $120,000 or less, their deduction would still be $500, but would increase from $100,000 maximum income to $120,000.
