House committee reviews bill to exempt taxes and gratuities from merchant interchange fees

The Dumont House Committee on Commerce & Economic Development on April 4 received testimony on H.3.17, a bill that would exempt the tax and voluntary gratuity portion of a card payment from interchange fees charged to merchants.

Legislative counsel Rick Siegel walked the committee through the bill's structure and definitions, saying the measure would let a merchant flag the tax or gratuity portion of a transaction so banks, card networks or processors would not charge interchange on that portion. "If you had a bill of $100…and $20 of those dollars were taxes and gratuity, only $80 would be subject to the interchange fee and the $20 would be not," Siegel said. He described the bill's key mechanics: merchants could transmit tax/gratuity amounts at authorization or submit tax documentation up to 180 days after the transaction; an acquirer, issuer or processor that receives documentation must credit the merchant…