Colo. Bill Could Exempt Retailers from Interchange on Taxes
Feb. 9, 2015
The latest front in the battle over interchange fees between card networks and issuing banks on one side and retailers on the other is taking shape in Colorado. A bill recently introduced in that state’s legislature would not allow the banks to collect interchange fees on the state or local taxes customers pay for products in the state. HB 15-1154 is sponsored by two Republicans and one Democrat and, according to reports, has widespread bipartisan support.
By law, governments are allowed to charge a convenience fee to cover the cost of accepting payment cards. In 12 states including Colorado, however, retailers are prohibited from collecting such surcharges. Even in states where surcharging is allowed under the law, few retailers feel they are able to do so. Retailers in Colorado that support the bill say it isn’t fair they are responsible for paying interchange on taxes that are not theirs to keep. If the bill passes, it will be the first law of its kind in the country.