November 10, 2021
The TLW is a member of a Main Street Wisconsin business coalition in support of a bill sponsored by Sen. Dan Feyen (R-Fond du Lac) and Rep. Tyler Vorpagel (R-Plymouth) to restrict swipe fees to retailers on the state tax portion of a transaction.
Assembly Bill 587 and Senate Bill 572 would:
Prohibit a “swipe fee” from being imposed against a merchant on the tax portion of a transaction when a purchase is made from the merchant using a credit card. The bill also prohibits a “swipe fee” from being imposed on the portion of any transaction that is a fee imposed by a city, village, town or county. Any person that violates this prohibition may be required to forfeit not more than $200 for each violation.
Wisconsin’s retailers are required to collect and remit taxes to the state, making them Wisconsin’s tax collectors. Providing this service to the state comes at a cost to the retailer, especially when a purchase by a consumer is made with a credit card. Credit card companies assess a fee to every transaction made with a credit card, including the tax portion of the transaction. Wisconsin’s Main Street retailers are losing money, while the credit card companies profit on the collection of state taxes.
It is estimated that swipe fees cost retailers $36.74 million in 2019 and $50.79 million in 2020 to processors for collecting taxes due to the state of Wisconsin. Credit card usage increased during the COVID-19 pandemic and increases in general with higher prices. As prices increase, the losses to retailers increase while credit card companies see higher profits.
Assembly Bill 587 and Senate Bill 572 prohibit a swipe fee from being imposed against a merchant on only the tax portion of a transaction when a purchase is made using a credit card. This does not impact transactions made with a debit card. Please take some time to contact your legislator and urge support for Assembly Bill 587 and Senate Bill 572 to help Main Street Wisconsin retailers. Small businesses in Wisconsin should not have to pay additional swipe fees for state-imposed fees or taxes.