I will soon be introducing companion legislation to Reps. Gallagher, Samuelson, and Scott (HB 2090) to address the rising cost of credit card swipe fees on small businesses.  According to 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 “swipe fee” of 3% or more on all transactions, including the portion of the transaction attributable to Pennsylvania's sales tax.

For example, if a family spends $100 at a restaurant and pays $6 in sales tax, the business owner would retain the $6 for the state. Yet credit card companies would charge the business owner an additional service fee on the full $106, meaning the business pays a fee on tax dollars it collected for the Commonwealth. While this may only result in pennies for any given transaction, the cumulative effect to businesses can be impactful to their bottom line.  My legislation would 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.

Small businesses collecting sales tax should not be forced to pay fees to credit card companies on the tax they're collecting on behalf of the state. These fees are either passed on to the consumer through higher prices or a credit card fee, or they are absorbed by the business - siphoning money away from Pennsylvania consumers and small businesses into the pockets of big credit card companies and Wall Street banks. As the federal government considers policies to address the high costs of swipe fees overall, we here in Pennsylvania can help our local businesses lower these unfair costs.

This legislation is pro-business, pro-consumer and anti-inflation so I hope you will join me in sponsoring this important effort to cut costs for Pennsylvanians.