Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Vendor Allowance topic
No spam. Unsubscribe anytime.
Committee hears bipartisan vendor-allowance bill to offset businesses’ cost of collecting sales tax
Summary
House File 2062 (as amended) would create a tiered vendor collection allowance to let retailers keep a small percentage of sales tax they collect to offset collection costs. The committee heard extensive business testimony; authors said the amended proposal ranges from 0.5% to 1.5% and the bill was laid over for omnibus consideration.
The House Tax Committee heard House File 2062 on Oct. 27, 2025 — a bipartisan vendor-allowance proposal intended to let businesses retain a small portion of sales tax they collect to offset costs such as credit‑card processing, point‑of‑sale systems and accounting.
Representative Robbins introduced the bill and moved the A1 amendment, which replaced her earlier, higher-percentage proposal with a more fiscally restrained version authored by Representative Norris. Robbins said the amendment adopted Representative Norris’s approach because it was “more affordable” while still addressing the issue.
Representative Norris described the problem as especially acute for small, Main‑Street retailers facing multiple local option sales taxes and rising credit‑card fees. "Three cents, five cents may not make a difference on one transaction, but you multiply that over thousands of transactions...it really adds up," Norris said.
Business owners and trade groups testified in support. Troy Redding, owner of Ally Restaurants, said credit‑card fees have risen from roughly 2% to over 3% of net sales and that his businesses paid $17,500 in card fees on $570,000 in sales‑tax collections in 2024; he estimated the amended bill would provide about $6,000 in credit for his operations. Bruce Newstead of Minnesota Retailers said a tiered structure gives higher percentage relief to the smallest retailers and noted 27 other states offer vendor allowances.
Other small-business testifiers described administrative burdens, audit risk and labor costs for remitting sales tax. Representative Robbins said the amended bill would set vendor-allowance rates in a range of 0.5% to 1.5%; she and Representative Norris described the measure as scalable and bipartisan.
Committee nonpartisan staff and members discussed the complicating effect of a patchwork of local option sales taxes and the fiscal cost of the allowance. The committee laid the bill over for possible inclusion in the omnibus tax bill by voice vote.
No final numeric fiscal action was taken; authors and stakeholders said they are willing to adjust percentages or caps during negotiations.
