An Act Concerning Interchange Fees On Electronic Payment Transactions.
Summary
HB 6460 would amend Connecticut’s general statutes to prohibit payment card networks from calculating interchange fees on the portion of an electronic payment transaction that represents sales and use taxes. In practical terms, the bill would prevent card networks from charging merchants fees on tax amounts that are collected for the state rather than retained as revenue by the seller.
The bill is narrowly focused on payment processing costs and does not change the underlying sales and use tax rates or collection obligations. Instead, it targets the fee structure used in card-based transactions, potentially reducing merchant costs on taxable purchases and affecting how card networks and payment processors handle transaction calculations.
Impact
If enacted, the bill would alter state law governing electronic payment transactions by limiting the base amount on which interchange fees may be imposed. The primary affected parties would be payment card networks, payment processors, merchants, and indirectly consumers and state tax collection systems. Merchants could see lower processing costs on taxable sales, while card networks would lose fee revenue tied to sales tax amounts.
Sentiment
There is no recorded committee transcript or vote history in the provided materials, so no formal legislative sentiment can be measured from debate or roll call. Based on the bill text alone, the proposal appears consumer- and merchant-friendly, with a policy rationale centered on reducing transaction costs and preventing fees from being charged on tax pass-through amounts.
Contention
The main point of potential contention is whether interchange fees should be calculated on the full transaction amount, including sales and use taxes, or only on the merchant’s taxable sale price. Supporters would likely argue that taxing the tax portion with card fees is unfair and increases business costs, while opponents may argue that changing fee calculations could complicate payment processing, affect network pricing models, or shift costs elsewhere in the payment ecosystem. No specific objections or supporters are identified in the available record.