The bill introduces a new section to Iowa law that excludes interchange fees imposed by payment card networks on the amount of taxes included in electronic payment transactions. Specifically, it defines key terms such as "credit card," "debit card," "interchange fee," and "tax," which encompasses various types of taxes including sales and use taxes, hotel and motel taxes, and others. The bill mandates that payment card networks must either deduct the tax amount from the interchange fee calculation at the time of settlement or rebate a proportionate amount of the interchange fee based on the tax included in the transaction.

Additionally, if a seller cannot capture and transmit the tax amount at the time of sale, the payment card network is required to accept proof of the tax collected and promptly credit the seller's settlement account. Violations of this bill by payment card networks will incur a civil penalty of $1,000 per violation, with collected funds directed to the state’s general fund. Alternatively, individuals may pursue private actions to enforce the bill, allowing them to recover any penalties imposed on the payment card network.