- Alabama will reduce its sales tax on food from 4% to 3% starting September 1, 2023, and to 2% in 2024 if the Education Trust Fund meets a certain growth benchmark.
- The definition of food for sales tax purposes will follow the federal Supplemental Nutrition Assistance Program.
- Local tax jurisdictions can reduce or exempt food from local sales and use taxes, but they must follow certain guidelines.
- Remote sellers that have opted to collect the Simplified Sellers Use Tax will continue to tax food at 8%.
- Mississippi and South Dakota still tax food at the general sales tax rate, while Hawaii and Idaho provide food tax credits or rebates to qualifying taxpayers.
- Other states subject food to a reduced rate of sales tax, but with some exceptions.
Source Avalara
