Updated 8/22/23 – Hoover Councilor Dr. Casey Middlebrooks contacted us with some errors in our post regarding the Hoover’s tax rate and what the state allows a city to cut as it pertains to groceries. We have updated the post with the correct information. The corrections are noted.

Also updated to show resolution passed by Hoover City Council on 8/21/23 for study.

In June 2023 the Alabama Legislature approved HB479, which Governor Ivey signed into law.  This bill will cut the grocery tax by 1 cent in September 2023.  Another 1 cent would be cut in September 2024, provided some conditions were met.

Alabama is one of 3 states that tax groceries without any credits on groceries.

The City of Hoover also taxes groceries as part of their sales tax (3.5% ) (corrected from 4.5%)

Should Hoover cut .875 cent from their sales tax on groceries? (Corrected from 1 cent – per Dr. Middlebrooks: “State will only allow a Municipality to lower is grocery tax by 25% per year granted certain revenue growths are met. That would allow a .875 reduction for Hoover. The cut off for the reduction each fiscal year according to the state is 60 days before Oct 1 of that year. If we pass a reduction, the earliest or will go into affect is Oct 1 2024)

In 2018 Hoover Mayor Frank Brocato proposed adding 1 cent to the city’s sales tax in order to pay for future projects.  Mr. Brocato and then City Administrator Allan Rice went on a speaking tour touting their tax plan, telling many organizations that if the city didn’t raise their tax rate, it would go broke.

The Hoover City Council, under then Council President Gene Smith, rejected the 1 cent increase, instead opting for ½ cent increase, which the Council approved by a 4-3 vote in July 2018.  Smith voted in favor of the increase, and current Council President John Lyda voted against it.  Smith said at the time that “It’s a lot easier to give back half a cent than a whole cent” justifying the increase.

By 2022 the city had a $34M surplus in their coffers, and the revenue kept on coming in, although at their last July 2023 Council meeting, City Chief Financial Officer Tina Bolt warned the Council that things might slow down.

Regardless, the surplus kept on going up.  Is it time for the city to consider cutting some of their portion of the grocery sales tax?

It should be noted that the city paid a consulting firm $15,000 to determine how this would impact the city’s revenues. Resolution Number 7003-23 – A Resolution Authorizing The Mayor To Execute An Agreement With Economic Research Services, Inc. For A Study To Analyze The Grocery Tax Rate And Economic Impact – Passed on 8/21/23.