An ingenious way for Alabamians to earn extra money

Publix Vestavia Hills

It really didn’t hit me until my family went to the beach last year.

We arrived in Destin– immediately driving to a nearby Publix on Highway 98 to buy our groceries.

We pushed our cart through the store and selected food, drinks, and snacks for our four day stay.

At the checkout counter, our cashier printed a receipt and told us how much we had saved on BOGO’s and other discounts.

But she didn’t mention one other big discount.

Our total bill was $121.42.

What was the other discount?

There is no sales tax on groceries in Florida.

None, zero, zilch!

I couldn’t believe my eyes.

If we had purchased the same items at our Publix in Vestavia Hills our sales tax would have been $12.14. (10%)

Do the math and guesstimate what we must all pay in grocery sales taxes every year.

But then my big idea!

Folks from Alabama could buy groceries in Florida with no sales tax to take back home to sell for 5% more. The buyer would save 5% and the sellers would earn 5%.

Okay, so this idea is not very practical.

But it does make you think.

Alabama, its counties, and municipalities fully tax groceries– only one of seven states to do so.

Hoover Mayor Frank Brocato told me when Hoover was evaluating a sales tax increase, his intention was to recommend Hoover not charge sales tax on groceries, but was told by his legal department that the state would not allow it.

Also keep in mind that according to USA Today, Alabama has the highest local tax rate in America. States like Delaware, Montana, New Hampshire, and Oregon have no sales tax at all.

Governor Ivey is now proposing we raise our state gas tax by 10¢ per gallon to fund better roads and bridges. It’s estimated that this will cost the average driver $55 per year or more.

Some Alabama lawmakers are proposing we cut taxes on groceries to balance out the increase in the gas tax.

“Nearly 62 percent of respondents said they’d support raising gas taxes if grocery taxes were decreased by the same amount, according to a statewide poll commissioned earlier this month by the Alabama Forestry Association. “

What do you think?

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David Sher is Co-Founder of AmSher Compassionate Collections.  He’s past Chairman of the Birmingham Regional Chamber of Commerce (BBA), Operation New Birmingham (REV Birmingham), and the City Action Partnership (CAP).

Invite David to speak to your group about a more prosperous Birmingham.

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19 thoughts on “An ingenious way for Alabamians to earn extra money”

  1. We are considering raising gas tax because the state needs revenue. Eliminating tax on groceries to “balance out” the increase in revenue defeats that purpose. So, how does that help? And, BTW, increasing tax on gas, yields the same regressive result as taxing groceries.
    What we need to do is adopt a lottery, and siphon back the lost tax revenue going to GA, TN, MS and FL. Then we can eliminate the tax on groceries.

        1. But electric vehicles use the roads and bridges; and since they don’t use gas, it’s only fair they pay some tax to maintain infrastructure, too.

          1. Karl, I agree with you 100%, but the amount of the fee ($200 per year) for an electric vehicle appears to be punitive–2nd highest in the U.S. Mercedes is spending $1 billions in Alabama to build electric vehicles. Other countries like China who want to dominate the electric car business are paying consumers incentives to buy electrics vehicles. It would be refreshing if Alabama would embrace the future.

      1. That’s exactly what I was thinking. How many of the states that don’t tax groceries have a lottery? I’ve found it interesting, at the least, that once you get across the MS State Line on the way to Philadelphia, how much better the pavement on the road is. Times have changed and Core Beliefs can be upheld just as a lottery can also be a personal choice, but for a brighter future we must think bigger.

  2. But, where do our property taxes rank compared to the other states you mentioned. I believe ours are much lower than most.

      1. Only Hawaii is lower. With the tourism $$ they rake in, I’m not even sure why they need a property tax.

  3. Of course the Forestry Commission provided the study. Their entire mission is to keep real estate property taxes low. This is why Alabama property taxes are the lowest in the Nation. An acre of timber may have $5-8 thousand in timber value, but is taxed as “undeveloped farm land” at well below that. Until this is addressed, there can never ever be sales tax relief.

    1. Agreed. This is why vast White-owned tracts of land in the Black Belt have no industry and the impoverished residents have few jobs. If a land-owner sold land to a huge industrial company – say an automotive plant – the land owners would lose their low-tax incentive to continue to use their land for timber & hunting instead of providing jobs for the historically poor.

  4. Great open letter to Gov. Ivey on Facebook by John Bagby about raising gas tax. A real blow to working poor in the state. If revenues have been siphoned off by court system, why not make court system raise fees?

  5. I think we should have a petition to have a lottery in Alabama. It is like a volunteered tax vs taxing necessities like food and gas which is not a choice and is wrong.
    The people want this.

  6. Agree that sales/gas taxes are regressive. It’s embarrassing that, when a mom spends $100 @ Walmart to buy groceries, diapers, etc, that we’re stealing $10 of her diaper, milk, food money.

    A ridiculous contrast from the AL tax code: The gross proceeds of the sales of all antibiotics, hormones and hormone preparations, drugs, medicines, and other medications including serums and vaccines, vitamins, minerals, or other nutrients for use in the production and growing of livestock and poultry by whomsoever sold are exempt from the sales and use taxes.

    Increase property taxes & end the tax on groceries. Progressive

  7. Increasing the gasoline tax to pay for road repair could possibly work in theory. In reality, most everyone in Alabama realizes that only 10 to $0.20 of each dollar, if we’re lucky, would actually go toward Road repair, the rest would go to the legislators pet projects. Having a well supervised lottery and eliminating the grocery tax in my opinion would be the way to go

  8. While I understand the gas tax increase funding roads, I am against it because of our grocery tax, yearly car tax, and extremely low property taxes. There needs to be some PSA’s on our current tax code and who/how it impacts so people can wrap their heads around what positives can come from slight increases to property taxes and not vote them down every time. And oh by the way the property taxes are the only taxes the public has a vote on – which makes there have to be a plan in place for the money before they are enacted- vs all the others where our elected officials make the decision.

    Love the comments – keep the discussion going!

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