Alabama Launches Two-Month Grocery Tax Holiday as Gov. Kay Ivey Touts Consumer Relief

New law suspends state grocery tax through June and introduces overtime income tax deduction, signaling broader push for cost-of-living relief

MONTGOMERY, Ala. | Alabama residents will begin seeing immediate relief at the checkout line as the state’s grocery tax holiday officially takes effect, a move Gov. Kay Ivey says underscores Alabama’s ongoing effort to ease financial pressure on working families.

The temporary tax suspension, which runs through the months of May and June, eliminates the state’s portion of the grocery tax, offering consumers a direct reduction in food costs during a period of persistent inflation and elevated household expenses.

“When we can cut taxes in Alabama and provide some relief to the hardworking people of this state, I am all for it,” Ivey said in a statement Friday. “This two-month holiday on the state grocery tax will provide direct relief.”

The initiative stems from House Bill 527, legislation signed earlier this month by the governor and carried by Rep. James Lomax and Sen. Arthur Orr. The bill represents a continuation of Alabama’s incremental rollback of grocery taxes, an issue that has drawn bipartisan attention in recent years as food prices have surged nationwide.

Beyond the immediate tax holiday, the legislation also includes a provision allowing an income tax deduction of up to $1,000 for qualified overtime compensation. Lawmakers say the measure is designed to reward additional work while helping households keep more of their earnings amid rising living costs.