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Bill would raise vendor compensation for sales-tax remittance to help small businesses
Summary
A sponsor said HB 439 would raise the vendor compensation carve-out for collecting sales and excise taxes from 3% of the first $3,000 remitted to 3% of the first $10,000 (then 0.5% over $10,000), citing recommendations of a 2024 study committee and the goal of easing costs for small retailers.
House Bill 439 would change the vendor compensation formula for merchants who collect and remit state sales and excise taxes, increasing the portion eligible for the 3% compensation rate.
The sponsor described the current vendor compensation as 3% of the first $3,000 remitted and proposed raising that base to the first $10,000 with the 3% rate; amounts over $10,000 would be compensated at 0.5%. "This bill raises it to the first 3 percent of $10,000, and it remains 1 half of 1% over $10,000," the sponsor said, arguing the adjustment would help local hardware stores, boutiques and restaurants and had not been raised in about 20 years. The change follows recommendations from a 2024 study committee examining the impacts of merchant fees on card processing.
Sponsor testimony noted the change could help small businesses recover from economic shocks — the presenter referenced recent storms affecting small businesses — and improve local merchants' bottom lines. Committee members did not record a vote during the presentation.
Why it matters: The bill seeks to reduce the effective fee burden on small merchants who remit sales taxes by raising the base amount that receives the higher compensation rate.
Next steps: HB 439 was presented on the committee calendar and may advance through the Rules Committee and subsequent floor action; no vote was recorded in this hearing.
