Alabama suspends state sales tax on groceries for two months
If you sell qualifying food items in Alabama, the state sales tax on those products drops to 0% from May 1 through June 30, 2026. Local city and county taxes still apply. Here’s what you need to update before the change takes effect.
Written by Alex Lamachenka
Head of DemandGen
Published
What changed
- Previous rule: Alabama’s state sales tax on food was 2%
- New rule: State sales tax on qualifying SNAP-eligible food items drops to 0%
- Effective dates: May 1, 2026 through June 30, 2026
- Enacted by: HB 527 (Act 2026-604)
- Local taxes: City and county rates are unaffected and continue to apply at existing rates, which vary by jurisdiction
Who this affects
- Grocery and general merchandise retailers with Alabama nexus selling SNAP-eligible food items
- Remote sellers shipping qualifying food products to Alabama customers
- Multi-channel ecommerce sellers using platform integrations or APIs — rate logic needs to reflect the suspension for qualifying product categories
- Marketplace sellers — confirm your platform is applying the correct state rate during the suspension window
- CPAs managing Alabama filing clients — the deduction for qualifying food sales must be applied correctly on returns covering May and/or June 2026
Next steps for sellers
- Update your Alabama tax calculation settings before May 1 — qualifying SNAP-eligible food items should have the state rate set to 0% for the suspension window; local rates stay active
- Confirm product categorization — hot prepared foods, alcohol, and tobacco are not included in the suspension and remain fully taxable
- Continue reporting all grocery sales on Alabama returns — the suspension works as a deduction for qualifying food sales when calculating state tax owed, not an exemption from reporting
- Do not adjust local tax settings — city and county obligations are unchanged
- Schedule a rate revert for July 1 — the standard state rate resumes on the first day of July
Other US Sales Tax Updates
Louisiana mandates e-filing and e-payment for most sales tax returns
Louisiana is expanding its electronic filing and payment requirements for sales and use tax returns. Sellers should move away from paper filings and payments to avoid penalties.
Alabama sales tax update: credit card fees no longer taxable in 2026
Beginning September 1, 2026, Alabama will exclude credit card processing fees from sales and use tax calculations. Learn what changed and how to prepare.
Florida’s 2025 Back-to-School Sales Tax Holiday
Florida will hold its Back-to-School Sales Tax Holiday from August 1–31, 2025. During this time, shoppers won’t pay sales tax on clothing under $100, school supplies under $50, learning aids under $30, and personal computers up to $1,500. Online purchases also qualify if the order is placed during the holiday.