Walmart executive supports Rhode Island bills opposing sales tax interchange fees

The House Committee on Small Business convened on April 3, 2025, in Rhode Island to discuss critical issues affecting local businesses, particularly focusing on interchange fees associated with credit card transactions. The meeting featured testimonies from various stakeholders, including representatives from Walmart and local liquor retailers, who expressed their concerns regarding the financial burdens imposed by these fees.

The session began with a representative from Walmart outlining the company's significant presence in Rhode Island, employing 2,600 individuals and collaborating with 106 suppliers. The representative emphasized their support for two proposed bills aimed at addressing interchange fees, particularly those levied on government-mandated taxes. They argued that while they are willing to pay reasonable fees on sales, it is unjust to incur additional charges on taxes collected on behalf of the state, which do not benefit retailers.

Following this, a local liquor store owner provided insight into the challenges faced by small businesses. He highlighted that credit card companies charge retailers not only for the convenience of accepting cards but also impose fees on sales tax collections. He noted that for every $100 collected in sales tax via credit card, retailers only receive about $97 after fees, effectively costing them money to act as tax collectors for the state.

The discussion also touched on the complexities of chargebacks, where retailers bear the financial burden when customers dispute transactions. The liquor store owner explained that chargebacks can occur even without direct interaction with the credit card, complicating the process for retailers who often lack the means to recover lost funds.

Committee members engaged with the witnesses, seeking clarification on the financial implications of these fees. One representative inquired about the total fees Walmart incurs from credit card transactions, to which the Walmart representative mentioned that the company paid over $13 million in state and local taxes in Rhode Island last year, with a total of $31 million collected on behalf of the state.

The meeting concluded with a consensus among the participants on the need for reform in the credit card processing fee structure. The witnesses urged the committee to consider the impact of these fees on small businesses and to support legislation that would alleviate the financial strain they impose.

Overall, the discussions highlighted the pressing need for legislative action to address the inequities faced by retailers in Rhode Island, particularly regarding interchange fees on sales tax collections. The committee plans to review the proposed bills further, with the potential for significant implications for small businesses across the state.