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05/20/2024 11:21 AM
Pennsylvania House of Representatives
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20230&cosponId=41804
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House of Representatives
Session of 2023 - 2024 Regular Session

MEMORANDUM

Posted: December 1, 2023 02:02 PM
From: Representative Greg Scott and Rep. Steve Samuelson
To: All House members
Subject: Prohibiting Swipe Fees on PA Sales & Use Tax
 
According to recent estimates by the Federal Reserve, about a third of all purchases in the United States are paid for by credit card.  That may not surprise most, but unknown to many consumers, merchants are charged a “swipe fee” applied as a percentage of the total transaction – including the state Sales & Use Tax – every time a customer pays by credit card.

 

This legislation would return fairness to the state’s tax system by prohibiting swipe fees from applying to the Sales & Use Tax portion of those transactions.  Merchants are merely performing their state-mandated duty to collect and remit taxes and should not have to pay an additional cost to do so.  Relieving our local merchants of this undue financial burden can make the critical difference for so many businesses already operating on thin margins.  Moreover, swipe fees are most merchants’ highest operating cost after labor and must be built into pricing, driving up expenses for the average family by close to $1,000 a year, according to the Merchants Payments Coalition. 

 

State legislatures are recognizing we can do something about escalating swipe fees, which have more than doubled over the past decade to a record $137.8 billion nationwide, according to the Nilson Report.  Similar legislation has already been introduced in more than a dozen states, but we have an opportunity to lead by example in Pennsylvania by taking action.  We encourage all our colleagues to join us by co-sponsoring this legislation.