This bill aims to prohibit payment card networks from applying interchange fees to sales tax and gratuity amounts associated with electronic payment transactions. Specifically, it states that a payment card network cannot establish, receive, or charge any interchange fee on the tax or gratuity amount if the merchant transmits this data during the authorization or settlement process. If a merchant fails to transmit the tax or gratuity data, they can submit it within 180 days after the transaction, and the payment card network is required to credit the merchant for the interchange fees charged on those amounts within 30 days of receiving the necessary information. Additionally, the bill ensures that payment card networks cannot manipulate interchange fees to circumvent these provisions.

Violations of this act by payment card networks will result in a civil penalty of $1,000 for each electronic payment transaction, along with a requirement to refund the merchant for the interchange fees related to the gratuity or tax amounts. The bill is designed to alleviate the financial burden of credit card fees on business owners, particularly in the service industry, enabling them to invest in their operations and hire more employees. The act will take effect 180 days after enactment and will apply to transactions conducted on or after that date.