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General Assembly Raised Bill No. 1460
January Session, 2025
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Referred to Committee on FINANCE, REVENUE AND
BONDING
Introduced by:
(FIN)
AN ACT CONCERNING INTERCHANGE FEES ON ELECTRONIC
PAYMENT TRANSACTIONS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. (NEW) (Effective October 1, 2026, and applicable to sales 1
occurring on or after October 1, 2026) (a) As used in this section: 2
(1) "Credit card" has the same meaning as provided in section 53a-3
128a of the general statutes; 4
(2) "Debit card" means any card, code, device or other means of 5
access, or any combination thereof, that is issued or authorized for use 6
to debit an asset account held directly or indirectly by a financial 7
institution and that may be used by the cardholder to obtain money, 8
goods, services or anything else of value, regardless of whether the card, 9
code, device or other means of access, or any combination thereof, is 10
known as a debit card. "Debit card" includes a general-use prepaid card, 11
as defined in 15 USC 1693l-1, as amended from time to time; 12
(3) "Electronic payment transaction" means a transaction in which a 13
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purchaser uses a payment card or other payment code or device issued 14
or approved through a payment card network to debit an asset account 15
or use a line of credit, whether authorization is based on a signature, 16
personal identification number or other means; 17
(4) "Interchange fee" means a fee charged to a retailer, as defined in 18
section 12-407 of the general statutes, for the purpose of compensating 19
the financial institution or other entity that issued the payment card for 20
such institution's or entity's involvement in the electronic payment 21
transaction; 22
(5) "Payment card" means a credit card, debit card or other card, code, 23
device or other means of access that is issued to an authorized user to 24
obtain money, goods, services or anything else of value; 25
(6) "Payment card network" means an entity that (A) directly or 26
through licensed members, processors or agents provides the 27
proprietary services, infrastructure and software that routes 28
information and data to conduct payment card transaction 29
authorizations, clearance and settlements, and (B) is used by a retailer 30
to accept as a form of payment a brand of payment card that may be 31
used to carry out electronic payment transactions; and 32
(7) "Settlement" means the transfer of funds from a purchaser's 33
account to a retailer upon electronic submission of finalized sales 34
transactions to the payment card network. 35
(b) (1) Each payment card network shall exclude from the amount on 36
which an interchange fee is charged the amount of tax imposed under 37
chapter 219 of the general statutes on a transaction that is an electronic 38
payment transaction. 39
(2) Each payment card network shall (A) deduct the amount of such 40
tax from the calculation of interchange fees specific to each electronic 41
payment transaction at the time of settlement, or (B) rebate an amount 42
of interchange fee proportionate to the amount attributable to such tax. 43
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If the retailer is able to capture and transmit the amount of tax relevant 44
to the sale at the time of sale as part of the transaction finalization, such 45
deduction or rebate shall occur at the time of settlement. If the retailer is 46
unable to capture and transmit such information at the time of sale, the 47
retailer may submit to the payment card network, and the payment card 48
network shall accept as proof, sales data showing the amount of such 49
tax collected on sales subject to an interchange fee, and the payment card 50
network shall promptly credit the retailer's settlement account. 51
(c) If a payment card network violates any provision of this section, 52
the Attorney General may bring an action against such payment card 53
network in the superior court for the judicial district of Hartford, 54
seeking (1) imposition and recovery of a civil penalty of not more than 55
one thousand dollars for each violation, and (2) a refund to retailers of 56
the amount of any interchange fees imposed in violation of this section. 57
This act shall take effect as follows and shall amend the following
sections:
Section 1 October 1, 2026, and
applicable to sales
occurring on or after
October 1, 2026
New section
Statement of Purpose:
To prohibit payment card networks from including sales and use taxes
in the amount on which interchange fees are imposed.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
underlined.]