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Committee backs bill to remove state sales tax on eyeglasses and contact lenses
Summary
The House Ways and Means Education Committee voted to give House Bill 176, which would exempt state sales tax on eyeglasses and contact lenses, a favorable report after sponsor Representative Shirey disputed the committee fiscal estimate and described exemptions and limits in the bill.
Representative Shirey introduced House Bill 176 to remove the state sales tax on eyeglasses and contact lenses; the committee voted to give the bill a favorable report.
Shirey told the committee that Alabama is one of six states that tax eyeglasses and contacts and that CMS classifies eyeglasses as prescription medical devices. Shirey said the change would help residents of all ages and noted seniors are disproportionately affected.
A Legislative Services Agency (LSA) fiscal note cited in committee put the annual revenue impact at $17,900,000. Shirey disputed that figure on the record, arguing the LSA method takes the total U.S. market and scales it to Alabama population and that the bill excludes online sales (which Shirey estimated at 37% for eyeglasses and 22% for contacts) and does not affect Medicaid recipients (about 20% of the state population). Using those adjustments, Shirey said his calculation brings the fiscal impact closer to $11,300,000.
Members asked whether the exemption would affect local sales taxes; Shirey said the bill would exempt only the state sales tax. He also said counties and cities would have an opt-in option.
Representative Collins moved the motion to give HB176 a favorable report; the motion was seconded and approved by voice vote.
