[{"_1":2,"_88":-5,"_89":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,76],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},"mediaId",6612697,"mediaKeyId","2888895-07f52c0665e18fd1b2f45421c717e091","parentId",2888895,"title","Committee hears rival bills to bar swipe fees on taxes and tips as merchants, banks clash on feasibility","audioSeconds",3424,"startMs",172000,"endMs",3596000,"viewUrl","/Search/View?dp=1&key=2888895-07f52c0665e18fd1b2f45421c717e091&start=172&end=3596","thumbnailUrl","https://assets.pipeline.soar.com/2888895-07f52c0665e18fd1b2f45421c717e091/thumbnail_172000.jpg","articleUrl","/articles/6612697/Rhode-Island/Committee-hears-rival-bills-to-bar-swipe-fees-on-taxes-and-tips-as-merchants-banks-clash-on-feasibility","mediaUrl","https://secure.pipeline.soar.com/6612697-a2a6e2354638a5ac53a518e5c25027fc/orig.mp4?Expires=1771119766&Signature=m~zadw4My48VL7elniByFGC~R4fq-0Jg8Z8LxhEi1pHF-5gVaoJLBvzqJl3UgM-e2dKbQy1TLoQkuzPOetMBCeKsMt9BnK7OzJkiNxUJR5~r0MQzxSUFupFsYljKjPfBRe3ya8Ce~OptaQTCrHZHb59~fsTk04pm2EFhqdd0m1~SXcV-DvOAI-bqRgu6TZBpZ3Bm16AX2FwsHgG18gzQj77M2neoez8pF-F07uRG5uK3M3C9smhyJ4i2OzRZJmHcqVCLF2bVa76qM0TBKGGob7iuwwW4PrMJXj6ecf69m2ud5Bn~OS8VyGe6Px20jwP5fxBtjIim0QLJzO1HH8IdDQ__&Key-Pair-Id=KUT5TJCACFTXG","author","State of Rhode Island","date","2025-04-03T00:00:00Z","article","The House Committee on Small Business met April 3, 2025, in Room A135 to hear testimony on two bills aimed at limiting card interchange fees: House Bill 5582 (which would restrict interchange fees on sales and excise taxes) and House Bill 5554 (which would prohibit interchange fees on taxes and gratuities).

Supporters told the committee the bills would give immediate relief to small merchants who currently pay a percentage fee when customers use credit or debit cards on amounts the merchant does not retain. Bill Walsh, testifying for the Rhode Island Hospitality Association, described the issue as \"a fairness issue,\" saying the fees erode already thin restaurant margins and noting that a growing share of transactions are by card. Written and oral testimony from hospitality and retail groups argued the savings could range from several thousand dollars a year for small operators to six figures for large venues.

The sponsor-backed presentation explained the two bills differ only in scope: HB 5582 focuses on state and local taxes remitted to government, while HB 5554 would also exempt gratuities and service charges. Testimony cited National Restaurant Association data estimating a typical Rhode Island full-service restaurant could save roughly $7,600 a year if gratuities and taxes were excluded from interchange calculations; witnesses said the bills would not end interchange fees on merchants' retained sales proceeds.

Opponents pushed back on legal and technical grounds. Deb Peters of the Electronic Payments Coalition said the interchange fee is one element of a three-part merchant fee and that the federal payment infrastructure currently reports only a single total amount for each card transaction. \"The technology does not exist yet for processing transactions at that level,\" she told the committee, arguing that building a system to split tax and tip from the base sale would be complex, time-consuming and likely to slow transaction processing.

Peters also referenced litigation arising after Illinois passed a broadly similar measure: she said a federal court issued a preliminary injunction in December 2024, and expanded that injunction in February 2025, limiting the reach of that state action. She warned that, if Rhode Island enacted a similar law before industry systems were ready, financial institutions could refuse to process the affected portion of transactions rather than risk civil penalties.

Will Ferrell of the Rhode Island Bankers Association said federal law already caps some debit-card fees and that, based on IRS data, an average effective interchange rate in Rhode Island is roughly 2 percent. He framed interchange charges as part of fraud protection and risk coverage the card-issuing bank provides. \"We're used to the luxuries of having a card,\" he said, describing how banks detect fraud and make merchants and consumers whole in many cases.

Retail and hospitality witnesses disputed that merchants fully benefit from card-enabled sales. Nick Feede Jr., representing independent liquor retailers, said effective erosion of tax receipts occurs: \"For every $100 of sales tax collected on a credit card... we're only really capturing around $97 of that,\" he said, characterizing the shortfall as coming from merchants' pockets.

Committee members asked several technical and data questions. Representative Phillips asked whether data exist showing the rate of card fraud; witnesses said that fraud rates vary across institutions and that some of the requested data would need to be provided later. Members also asked about timeframes and practical effects if the law took effect immediately; opponents warned of infrastructure gaps and potential refusal by some processors to accept tax/tip amounts on cards while systems are built.

Procedural action: the committee voted, at the start of the hearing, to \"hold all bills for further study\" — a procedural motion the chair said does not indicate a position on the merits. The motion passed on a voice vote.

The hearing record includes written testimony filed by both supporters and opponents; committee members requested additional technical information and data on fraud and processing options before further consideration.","mediaType","Video","parentTitle","House Committee on Small Business: 4-3-2025","oneSentenceSummary","The House Committee on Small Business met April 3, 2025, in Room A135 to hear testimony on two bills aimed at limiting card interchange fees: House Bill 5582 (which would restrict interchange fees on sales and excise taxes) and House Bill 5554 (which would prohibit interchange fees on taxes and gratuities).","taxTitle","2025 Legislature RI, Rhode Island","taxId",77689,"location","Rhode Island","headline","","shortSummary",{"_33":77,"_35":36,"_37":38,"_39":78,"_41":79,"_43":80,"_45":81,"_47":82,"_49":83,"_51":84,"_53":85,"_55":56,"_57":58,"_59":86,"_61":62,"_63":64,"_65":87,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6612692,"Bill to let caterers buy from wholesalers draws split testimony; liquor stores cite historic agreement",2074,3605000,5679000,"/Search/View?dp=1&key=2888895-07f52c0665e18fd1b2f45421c717e091&start=3605&end=5679","https://assets.pipeline.soar.com/2888895-07f52c0665e18fd1b2f45421c717e091/thumbnail_3605000.jpg","/articles/6612692/Rhode-Island/Bill-to-let-caterers-buy-from-wholesalers-draws-split-testimony-liquor-stores-cite-historic-agreement","https://secure.pipeline.soar.com/6612692-4082222375f7a5456f7590e85f78a364/orig.mp4?Expires=1771119766&Signature=JYu3ebgb8zlP9nc7Iew2JxF8BMAM2BJ4dc7rJJCXg8T~lhTsWFgMyD8bLcR0VrHageOhLaoifm6PXcw4ZWwOUgf91tSOp9laPsQTH~fy6Bv37m7XoF54urNg-6uphhk42L-XaR222kk~vHTuRkzbtMEYAqHQPvh2d4FMQNbYb3Skbykn5lsdVRpzLtzqs-4IwyY6gUi2-Tu1BpDJ4uGu4EP0r~OOZrCWTQgsAe9TYnYxbEJJ4yWgvAuBbt4jc6hvZCKKwOJPykPN6usl32S9DT77V8RYaUb5ze8bL8bmHA2Nb2Zjsrfj1OP8Q2LN0fcaJU6LovEoAH8Df-qIPwXefQ__&Key-Pair-Id=KUT5TJCACFTXG","The House Committee on Small Business heard testimony April 3, 2025, on House Bill 5885, introduced by Representative Casey, which would allow holders of a class P catering liquor license to purchase alcoholic beverages from wholesalers rather than being required to buy from class A retail liquor stores.

Proponents — including caterers and hospitality trade representatives — told the committee the change is a matter of competitive fairness and operational practicality. TR McGrath, owner of McGrath Clamb Bakes and Catering, said caterers routinely place large case orders that are effectively pass-through deliveries from distributor trucks and that buying wholesale would simplify logistics and lower costs. Bill Walsh of the Rhode Island Hospitality Association said the proposal would \"ensure fair competition within our hospitality industry,\" allowing caterers to negotiate volume discounts and service arrangements similar to restaurants and hotels.

Several caterers described service limitations they experience when required to purchase through retail outlets: limited availability of specific items, manual ordering burdens, delivery constraints and the difficulty of managing large event orders through retail stock. Karen of Blackstone Caters said the state has only a handful of active caterers and that allowing wholesale purchase would not eliminate retail liquor stores.

Liquor retailers opposed the bill. Nick Feede Jr., executive director of the Rhode Island Liquor Operators Collaborative, said the class P structure was created to address insurance and public-safety concerns and to preserve a negotiated commercial relationship with retailers. He told the committee that many retail stores extend credit terms, accept returns of unsold product and provide customer service and inventory support; those features, he said, would be lost if caterers bought wholesale.

Bob Goldberg, who said he helped negotiate the original class P arrangement about two decades ago, told the panel the retail–caterer arrangement was the product of a long negotiation and that independent stores depend on those sales; he characterized the earlier agreement as a quid pro quo that helped protect small retailers' business models.

Committee members asked about likely price differences, delivery minimums from wholesalers, and whether restaurants already have access to wholesale purchase channels. Witnesses said restaurants often buy wholesale; caterers argued they should have the same option. Retail representatives said wholesalers impose minimums and other commercial terms, and that changing the rule would shift revenue to wholesalers and away from local retailers that currently service caterers.

No final vote on the bill was taken; as with the other items on the agenda, the committee had earlier voted to hold all bills for further study. Witnesses on both sides filed written testimony and committee members asked for additional detail on commercial terms, delivery minimums and the potential competitive impact on small retailers.","The House Committee on Small Business heard testimony April 3, 2025, on House Bill 5885, introduced by Representative Casey, which would allow class P license holders (caterers) to purchase alcoholic beverages directly from wholesalers.","actionData","errors"]

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Committee hears rival bills to bar swipe fees on taxes and tips as merchants, banks clash on feasibility

Bill to let caterers buy from wholesalers draws split testimony; liquor stores cite historic agreement