Iowa House Bill HSB324

Iowa 2025-2026 Regular Session

• Introduced: 4/1/25
• Refer: 4/1/25

Caption

A bill for an act excluding interchange fees imposed upon certain taxes at points of sale.

Impact

HSB324 seeks to amend existing laws under Iowa's Code Chapter 423 by establishing parameters under which interchange fees are calculated. By excluding tax amounts from these fees, the bill intends to provide relief to sellers who are currently impacted by the costs incurred from such fees. This proposed change is anticipated to make electronic transactions fairer for merchants, particularly in industries with significant tax burdens, enhancing the overall fairness of financial transactions in Iowa.

Summary

House Study Bill 324 (HSB324) proposes amendments regarding interchange fees associated with electronic payment transactions, specifically focusing on the exclusion of taxes from the calculation of these fees. This bill aims to prevent payment card networks from charging interchange fees on the total transaction amount if it includes sales taxes. According to the provisions set forth in the bill, any tax amount must be deducted from the interchange fee at the time of transaction settlement, which is critical for ensuring that sellers do not incur additional charges due to taxation during electronic transactions.

Contention

Discussions surrounding HSB324 reveal potential points of contention regarding its implications for payment card networks and consumer transactions. Critics argue that while the bill may provide temporary relief for sellers, it could lead to increased costs for payment processors, which might be passed on to consumers in the long run. Furthermore, there is concern about the enforcement of the provisions, particularly how effectively penalties for non-compliance will be levied against payment card networks that fail to adhere to the new rules as set out in the legislation.