HB306 By Representatives Knight, Daniels, Clarke, Robinson, Moore (M), Rogers, Forte, Lawrence, Coleman, Drummond, McClammy, Holmes (A), England, Warren, Scott and Hall RFD Ways and Means Education Rd 1 24-FEB-16

SYNOPSIS: Under existing law, the state imposes sales or use taxes upon certain persons, firms, or corporations. Sales of certain items are taxed at a reduced rate. Sales of other items are exempt from the taxes.

This bill would exempt sales of food from the sales and use taxes beginning September 1, 2016.

A BILL TO BE ENTITLED AN ACT

To exempt sales of food from the sales and use taxes beginning September 1, 2016.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. For purposes of Section 2 of this act, the following terms are defined as follows:

(1) FOOD. Food as defined in 7 U.S.C §2011, et seq., for the purposes of the federal Supplemental Nutrition Assistance Program regardless of where or by what means food is sold. In the event that the federal Supplemental Nutrition Assistance Program definition no longer exists, the Legislature shall provide a new definition of food by general law.

(2) SALES TAX. The tax levied in Section 40-23-2, Code of Alabama 1975, on the gross sales or gross receipts from the sale of tangible personal property.

(3) USE TAX. The tax levied in Section 40-23-61, Code of Alabama 1975, on the storage, use, or other consumption of tangible personal property in Alabama.

Section 2. Notwithstanding any other provision of law, for taxable periods beginning on and after September 1, 2016, the gross receipts from the sale or use of food shall be exempt from the state sales and use taxes. Local governments shall continue to collect sales taxes on food at the same rate collected for the local portion of the retail sales tax.

Section 3. This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming a law.

Taxation

Sales and Use Tax

Food

Business and Commerce