Rhode Island 2025 Regular Session

Rhode Island House Bill H5554 Compare Versions

Only one version of the bill is available at this time.

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5	5	2025 -- H 5554
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7	7	LC001580
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9	9	S T A T E O F R H O D E I S L A N D
10	10	IN GENERAL ASSEMBLY
11	11	JANUARY SESSION, A.D. 2025
12	12	____________
13	13
14	14	A N A C T
15	15	RELATING TO COMMERCI AL LAW -- GENERAL REGULATORY PROVISION S --
16	16	INTERCHANGE FEES
17	17	Introduced By: Representatives McEntee, Voas, Cortvriend, Dawson, Shallcross Smith,
18	18	Caldwell, Spears, Phillips, Lima, and Cotter
19	19	Date Introduced: February 26, 2025
20	20	Referred To: House Corporations
21	21
22	22
23	23	It is enacted by the General Assembly as follows:
24	24	SECTION 1. Title 6 of the General Laws entitled "COMMERCIAL LAW — GENERAL 1
25	25	REGULATORY PROVISIONS" is hereby amended by adding thereto the following chapter: 2
26	26	CHAPTER 26.2 3
27	27	INTERCHANGE FEES 4
28	28	6-26.2-1. Definitions. 5
29	29	(a) As used in this chapter. the following words and terms shall have the following 6
30	30	meanings: 7
31	31	(1) "Acquirer bank" means a member of a payment card network that contracts with a 8
32	32	merchant for the settlement of electronic payment transactions. An acquirer bank may contract 9
33	33	directly with merchants or indirectly through a processor to process electronic payment 10
34	34	transactions. 11
35	35	(2) "Authorization" means the process through which a merchant requests approval for an 12
36	36	electronic payment transaction from the issuer. 13
37	37	(3) "Clearance" means the process of transmitting final transaction data from a merchant 14
38	38	to an issuer for posting to the cardholder's account and the calculation of fees and charges, including 15
39	39	interchange fees, that apply to the issuer and the merchant. 16
40	40	(4) "Credit card" means a card, plate, coupon book, or other credit device existing for the 17
41	41	purpose of obtaining money, property, labor, or services on credit. 18
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45	45	(5) "Debit card" means a card or other payment code or device issued or approved for use 1
46	46	through a payment card network to debit an asset account, regardless of the purpose for which the 2
47	47	account is established, whether authorization is based on a signature, a personal identification 3
48	48	number, or other means. "Debit card" includes a general use prepaid card, as defined in 15 U.S.C. 4
49	49	§ 16931-I. "Debit card" does not include paper checks. 5
50	50	(6) "Electronic payment transaction" means a transaction in which a person uses a debit 6
51	51	card, a credit card, or other payment code or device issued or approved through a payment card 7
52	52	network to debit a deposit account or use a line of credit, whether authorization is based on a 8
53	53	signature, a personal identification number or other means. 9
54	54	(7) "Gratuity" means a voluntary monetary contribution to an employee from a guest, 10
55	55	patron, or customer in connection with services rendered. 11
56	56	(8) "Interchange fee" means a fee established, charged, or received by a payment card 12
57	57	network for the purpose of compensating the issuer for its involvement in an electronic payment 13
58	58	transaction. 14
59	59	(9) "Issuer" means a person issuing a debit card or credit card or the issuer's agent. 15
60	60	(10) "Merchant" means a person that collects and remits a tax. 16
61	61	(11) "Payment card network" means an entity that: 17
62	62	(i) Directly or through licensed members, processors, or agents, provides the proprietary 18
63	63	services, infrastructure, and software to route information and data for the purpose of conducting 19
64	64	electronic payment transaction authorization clearance and settlement; and 20
65	65	(ii) A merchant uses to accept as a form of payment a brand of debit card, credit card, or 21
66	66	other device that may be used to carry out electronic payment transactions. 22
67	67	(12) "Person" means any individual, firm, public or private corporation, government, 23
68	68	partnership, association, or any other organization or entity. 24
69	69	(13) "Processor" means an entity that facilitates, services, processes, or manages the debit 25
70	70	or credit authorization, billing, payment procedures, or settlement with respect to any electronic 26
71	71	payment transaction. 27
72	72	(14) "Settlement" means the process of transmitting sales information to the issuing bank 28
73	73	for collection and reimbursement of funds to the merchant and calculating and reporting the net 29
74	74	transaction amount to the issuer and merchant for an electronic payment transaction that is cleared. 30
75	75	(15) "Tax" means any sales, use, occupancy, or excise tax imposed by the state or a political 31
76	76	subdivision thereof. 32
77	77	(16) "Tax and gratuity documentation" means documentation sufficient or data sufficient 33
78	78	for the payment card network to determine the total amount of the electronic payment transaction 34
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82	82	and the tax or gratuity amount of the transaction. It may be related to a single electronic payment 1
83	83	transaction or multiple electronic payment transactions aggregated over a period of time to include, 2
84	84	but are not limited to, invoices, receipts, journals, ledgers, and tax returns filed with the department 3
85	85	of revenue or local taxing authority. 4
86	86	6-26.2-2. Interchange fees on taxes and gratuities prohibited. 5
87	87	(a) An issuer, a payment card network, an acquirer bank, or a processor shall not receive 6
88	88	or charge a merchant any interchange fee on the tax amount or gratuity of an electronic payment 7
89	89	transaction if a merchant informs the acquirer bank or its designee of the tax or gratuity amount as 8
90	90	part of the authorization or settlement process for the electronic payment transaction. The merchant 9
91	91	shall transmit the tax or gratuity amount data as part of the authorization or settlement process to 10
92	92	avoid being charged interchange fees on the tax or gratuity amount of an electronic payment 11
93	93	transaction. 12
94	94	(b) A merchant that does not transmit the tax or gratuity amount data in accordance with 13
95	95	this section may submit tax and gratuity documentation for the electronic payment transaction to 14
96	96	the acquirer bank or its designee no later than one hundred eighty (180) days after the date of the 15
97	97	electronic payment transaction, and, within thirty (30) days after the merchant submits the 16
98	98	necessary tax and gratuity documentation, the issuer or a payment card network shall credit to the 17
99	99	merchant the amount of interchange fees charged on the tax or gratuity amount of the electronic 18
100	100	payment transaction. 19
101	101	(c) This section shall not create liability for a payment card network regarding the accuracy 20
102	102	of the tax or gratuity data reported by the merchant. 21
103	103	(d) It shall be unlawful for an issuer, a payment card network, an acquirer bank, or a 22
104	104	processor to alter or manipulate the computation and imposition of interchange fees by increasing 23
105	105	the rate or amount of the fees applicable to or imposed upon the portion of a credit or debit card 24
106	106	transaction not attributable to taxes or gratuities to circumvent the provisions of this section. 25
107	107	6-26.2-3. Penalties. 26
108	108	An issuer, a payment card network, an acquirer bank, a processor, or other designated entity 27
109	109	that has received the tax or amount data and violates the provisions of this chapter shall be subject 28
110	110	to a civil penalty of one thousand dollars ($1,000) per electronic payment transaction conducted in 29
111	111	violation of this chapter, and the issuer or payment card network shall refund the merchant the 30
112	112	interchange fee calculated on the tax or gratuity amount relative to the electronic payment 31
113	113	transaction. 32
114	114	6-26.2-4. Severability. 33
115	115	If any of the provisions of this chapter are held invalid, the remainder shall not be affected 34
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119	119	as a result, nor shall the application of the provision held invalid to persons or circumstances other 1
120	120	than those as to which it is held invalid be affected as a result. 2
121	121	SECTION 2. This act shall take effect on January 1, 2026. 3
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128	128	EXPLANATION
129	129	BY THE LEGISLATIVE COUNCIL
130	130	OF
131	131	A N A C T
132	132	RELATING TO COMMERCI AL LAW -- GENERAL REGULATORY PROVISIONS --
133	133	INTERCHANGE FEES
134	134	***
135	135	This act would prohibit the charging of interchange fees on taxes and gratuities. 1
136	136	This act would take effect on January 1, 2026. 2
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138	138	LC001580
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