The bill S.316, introduced by Senators Perchlik, Gulick, Major, Plunkett, and Watson, aims to prohibit credit card fees on the portions of transactions that are attributable to taxes or gratuities. It establishes a new subchapter, Subchapter 4A, under 9 V.S.A. chapter 63, which defines key terms such as "electronic payment transaction," "gratuity," "interchange fee," "issuer," "merchant," "payment card network," "processor," and "tax." The bill explicitly states that payment card networks cannot charge or publish interchange fees based on transaction amounts that include taxes or gratuities, nor can they apply surcharges to other parts of the transaction to compensate for this exclusion.

Additionally, the bill outlines enforcement mechanisms and penalties for violations, including a civil penalty of $1,000 per transaction for payment card networks that do not comply. Merchants whose rights are violated under this subchapter can pursue civil action for damages or equitable relief. The Attorney General is granted authority to conduct investigations and take civil actions related to violations. The provisions of this subchapter are also declared severable, ensuring that if any part is found invalid, the remaining provisions will still be enforceable. The act is set to take effect on July 1, 2026.