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Committee hears bill establishing new B&O rate and deduction for payment card processors
Summary
House Bill 2020 would create a new B&O tax classification for payment card processing, set a 3% rate effective Jan. 1, 2026, and allow a permanent deduction for interchange and certain network fees; Department of Revenue provided a fiscal estimate and industry witnesses described negotiations to address fiscal impacts.
House Bill 2020, heard by the House Finance Committee on March 18, would establish a new business-and-occupation (B&O) tax rate specifically for payment card processing activities and allow a deduction for interchange fees, network fees and portions of fees retained by other processors.
Committee staff summarized the current B&O structure and surcharges, noting the service-and-other classification has different rates depending on gross income and that certain surcharges (an advanced computing surcharge and a financial-institution surcharge) may still apply. Rochelle Harris said:…
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