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Senate committee debates bill to bar interchange fees on state and local sales taxes
Summary
Senator Echols’ SB 512 would prohibit merchants from being charged interchange (swipe) fees on the tax portion of transactions. Retailers backed the measure as fairness and cost relief; banks, credit unions and processors warned of fraud risk, technical complexity and market interference. The committee took testimony but did not vote.
Senator Echols presented SB 512 to a Senate committee, saying the bill would prohibit interchange (commonly called swipe) fees from being assessed on state and local sales and excise taxes that merchants are required to collect and remit.
“What's in what world is a tax on a tax?” Echols asked, framing the bill as restoring fairness to merchants who collect taxes but are charged interchange on tax amounts. The bill would let card networks exclude taxes from interchange calculations or require quarterly refunds proportionate to tax amounts; violations would carry a civil penalty equal…
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