According to recent estimates by the Federal Reserve, about a third of all purchases in the United States are made by credit card. What most consumers don’t realize is that with every credit or debit card purchase, credit card companies and their affiliated banks charge merchants a credit card “swipe fee” of 3% or more on all transactions, including the portion of the transaction attributable to sales tax.

Merchants have no choice but to collect sales tax as required by law. When extra credit card fees are added to the sales tax, merchants either absorb this cost or pass it on to consumers. This means credit card fees directly contribute to higher prices at the register and can hinder the ability for businesses to grow. While only the federal government could prohibit all credit card swipe fees, states like Pennsylvania can eliminate credit card fees on the sales tax portion of transactions.

To be clear, there should be no upcharge on sales taxes – not for local businesses, and not for the families who support them. That is why we will soon introduce legislation to prohibit credit card swipe fees on the sales tax portion of transactions. Purchases of goods and services that are not subject to the tax will not be affected.

Simply put, more affordable goods and services would mean more total purchases and in turn higher profits for local businesses. Instead, we see historic inflation while large financial institutions create revenue by adding fees on top of a tax, which are then passed on to businesses and consumers.

This legislation is pro-business, pro-consumer and anti-inflation. Please join us in sponsoring this important legislation.