MONTGOMERY – The Alabama House of Representatives today passed a $192 million tax cut package. The package includes legislation aimed at reducing the cost of groceries, supporting senior citizens on fixed incomes, and cutting taxes on earned income.
“With the passage of this tax cut package, the Alabama House of Representatives has now passed 15 tax cuts since the current quadrennium began in 2022,” said House Speaker Nathaniel Ledbetter. “As shopping carts get lighter and grocery bills continue to rise, I am particularly proud that we were able to double down on the grocery tax cut, which is the largest cut in state history and will save Alabama families a minimum of $236 per year.”
The package was sponsored by Rep. Danny Garrett (R-Trussville), who chairs the House Ways and Means Education Committee.
“Any time the Legislature is in a position to cut taxes and help every single Alabamian hold on onto more of their hard-earned money, we need to act upon that opportunity,” said Rep. Garrett. “Everyone is experiencing sticker shock at the grocery store, senior citizens are living on fixed incomes that do not go as far as they once did, and every working Alabamian benefits from increasing the optional standard deduction. I am proud to carry this package and look forward to continue working to provide relief to the people of Alabama.”
The package passed today includes:
HB386 – Accelerates the Grocery Tax Cut by an additional 1%, bringing the total reduction to 2% since 2023. This would result in an additional estimated $123 million in annual savings for Alabama families. At 2%, the Grocery Tax Cut amounts to a $246 million tax cut.
HB387 – Removes the provision that currently prevents local governments from reducing their grocery tax.
HB388 – Doubles the state’s tax exemption for withdrawals from defined contribution retirement plans, increasing it from $6,000 to $12,000. HB388 amounts to a $44.8 million tax cut.
HB389 – Increases the income floor and the amount of the optional standard deduction and increases the income threshold for the maximum dependent exemption, further reducing the state income tax burdens for Alabamians. HB389 amounts to $23.8 million tax cut.
Media Release/Charles Murry/Director of Communications/Office of House Speaker Nathaniel Ledbetter
