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Taxes on food are levied in a variety of ways and vary state by state in the United States.  Taxes on groceries purchased for preparation and consumption at home are usually taxed at a lower rate than the general sales tax, while taxes on food prepared at a restaurant are usually taxed at a higher rate.  Even within these parameters, taxes on food vary by type, city, and locality.  For example, in California, there is no sales tax charged on food purchased at a restaurant on a to-go or take-out basis, but sales tax is charged on food purchased for dining in.  In Alabama, Montgomery has a 10 percent sales tax rate, while Auburn has a 9% sales tax rate.1
Alabama is one of only two states in the United States that continue to apply their sales tax fully to food purchased for home consumption without providing any offsetting relief for low- and moderate-income families, the other being Mississippi.2   Thirty-one states (62 percent) exempt groceries from state sales tax completely, eight states tax groceries at a lower rate, and five states offer offsetting tax credits for lower-income families.2   The remaining states have no state sales tax.  Alabama has considered eliminating or reducing its sales tax on groceries for many years, but lawmakers have so far been unsuccessful.  Every year since 1992, a bill has been introduced to alter the sales tax on groceries in Alabama, but nothing has ever been enacted.3
Other states have debated enacting a so-called “fat tax” against food.  This means charging a higher tax on food considered unhealthy in an effort to get people to eat healthier foods.  Some countries, such as Denmark and Hungary, have already implemented these fat taxes.  Mexico recently enacted new taxes on junk food and sugary drinks in an attempt to combat its obesity problem.  However, a study from the British Medical Journal found that taxation needs to be at least 20 percent to have any significant effect on obesity and cardiovascular disease.4
Food taxation is a long, hotly debated issue.  There are many people who feel that food, being a basic necessity of life, should not be taxed.  However, the loss of tax revenue is an important consideration of state lawmakers.  The recent rise of obesity in many countries has led lawmakers to consider levying additional food taxes, but many feel the government should not try to control what people eat.  There is no easy solution to these problems, and the debates wage on.
1 Alabama Department of Revenue. (2014). Sales & Use Tax City & County Rates.  Retrieved from http://revenue.alabama.gov/salestax/sales/index.cfm?Action=City.
2Center on Budget and Policy Priorities. (2009). Which States Tax the Sale of Food for Home Consumption? Retrieved from http://www.cbpp.org/cms/?fa=view&id=1230.
3The Associated Press. (2014). Twenty-two years and counting: Alabama lawmakers hear another proposal to remove state sales tax on food. Retrieved from http://blog.al.com/wire/2014/02/once_again_alabama_lawmakers_p.html.
4Koebler, Jason.  (2012). Junk Food Tax Must Be Fat, or Don’t Bother, British Study Says.  Retrieved from http://www.usnews.com/news/articles/2012/05/15/junk-food-tax-must-be-fat-or-dont-bother-british-study-says/

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