Bill > AB1065

This bill introduces the Consumer Inflation Reduction and Tax Fairness Act, which aims to prevent credit card networks, banks, and processors from charging interchange fees (transaction processing fees) on the tax portion of electronic payment transactions. The bill defines several key terms, including what constitutes a tax, and establishes a process for merchants to avoid being charged these fees by providing tax amount data during transaction authorization or settlement. If merchants don't initially provide tax data, they can submit tax documentation within 180 days to receive a credit for interchange fees charged on the tax portion of the transaction. The bill prohibits payment card networks, acquirer banks, and processors from manipulating fee calculations to circumvent the law's intent. Violations can be enforced under California's Unfair Competition Law, with courts considering factors like the entity's control over tax data and efforts to implement compliant processes. Importantly, the bill does not hold payment networks or banks liable for merchant errors in tax data reporting, provided they did not knowingly disregard reliable information. The legislation is designed to reduce the financial burden on merchants by preventing them from being charged processing fees on tax amounts.

Budget and Finance, Justice

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260AB1065