Bill > SB0370

This bill modifies Tennessee tax law by requiring payment card networks (like Visa or Mastercard) to exclude state and local taxes from the calculation of interchange fees (transaction fees charged to merchants when customers use credit or debit cards). Specifically, the bill defines several key terms including electronic payment transactions, payment card networks, and types of applicable taxes, and mandates that taxes such as sales tax, hotel occupancy taxes, alcoholic beverage taxes, and rental vehicle surcharge taxes must not be included when determining interchange fees. Payment card networks must either deduct these tax amounts from interchange fee calculations at the time of settlement or provide a proportional rebate to merchants. If a merchant cannot immediately capture tax amounts during a transaction, the payment card network must accept proof of collected taxes and credit the merchant's account. The bill also establishes a civil penalty of up to $1,000 per violation for payment card networks that do not comply with these requirements, with the penalty payable to the plaintiff. The legislation will take effect on July 1, 2025, with the goal of reducing transaction costs for merchants by preventing them from being charged interchange fees on tax amounts.

Business and Industry

https://wapp.capitol.tn.gov/apps/Billinfo/default.aspx?BillNumber=SB0370&ga=114