Vermont S 135: An act relating to credit card fees and requiring the acceptance of cash

Bill Text

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S.135 1
Introduced by Senator Perchlik 2
Referred to Committee on 3
Date: 4
Subject: Commerce and trade; consumer protection 5
Statement of purpose of bill as introduced: This bill proposes to prohibit credit 6
card fees on the amount of a transaction that is tax or gratuity and to require 7
retailers to accept cash for all transactions under $500.00. 8
An act relating to credit card fees and requiring the acceptance of cash 9
It is hereby enacted by the General Assembly of the State of Vermont: 10
Sec. 1. 9 V.S.A. chapter 63, subchapter 4A is added to read: 11
Subchapter 4A. Credit Card Fees on Taxes and Gratuities 12
§ 2480s. PROHIBITION ON FEES 13
(a) Definitions. As used in this subchapter: 14
(1) “Acquirer bank” means a member of a payment card network that 15
contracts with a merchant either directly or indirectly through a processor for 16
the settlement of electronic payment transactions. 17
(2) “Electronic payment transaction” or “transaction” means a 18
transaction in which a person uses a debit card, credit card, or other payment 19
code or device issued or approved through a payment card network to debit a 20

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deposit account or use a line of credit, whether authorization is based on a 1
signature, a personal identification number, or other means. 2
(3) “Gratuity” means: 3
(A) voluntary monetary contribution received by a merchant from a 4
guest, patron, or customer for services rendered; and 5
(B) an automatic service fee received by a merchant from a guest, 6
patron, or customer for services rendered that is intended to replace the need 7
for a voluntary monetary contribution pursuant to subdivision (A) of this 8
subdivision (3). 9
(4) “Interchange fee” means a fee established, charged, or received by a 10
payment card network for the purpose of compensating the issuer for its 11
involvement in an electronic payment transaction. 12
(5) “Issuer” means a person who issues a debit card or a credit card. 13
(6) “Merchant” means a person that collects and remits a tax. 14
(7) “Payment card network” means an entity that directly or through 15
licensed members, processors, or agents provides the proprietary services, 16
infrastructure, and software that route information and data to facilitate 17
transaction authorization, clearance, and settlement, and that merchants are 18
required to access in order to accept a specific brand of general-purpose credit 19
cards, charge cards, debit cards, or stored-value cards as payment for goods 20
and services. 21

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(8) “Processor” means an entity that facilitates, services, processes, or 1
manages a debit card or credit card authorization, billing, transfer, payment 2
procedures, or settlement with respect to an electronic payment transaction. 3
(b) Requirements. 4
(1) With respect to transactions involving a merchant and subject to the 5
restrictions set forth in subdivision (2) of this subsection, no issuer, payment 6
card network, acquirer bank, or processor shall charge or collect from a 7
merchant an interchange fee on the amount of the transaction that is a: 8
(A) tax; or 9
(B) gratuity. 10
(2)(A) A merchant shall transmit the amount of a transaction that is tax 11
and gratuity to the acquirer bank, payment card network, issuer, or any 12
designee of the foregoing as part of the transaction’s authorization or 13
settlement process. 14
(B) An acquirer bank, payment card network, issuer, or any designee 15
of the foregoing that does not receive from a merchant the amount of a 16
transaction that is tax and gratuity as part of the transaction’s authorization or 17
settlement process pursuant to subdivision (A) of this subdivision (2) may 18
charge the merchant an interchange fee on the entire transaction. 19
(C) A merchant that does not transmit the amount of a transaction 20
that is tax and gratuity to the acquirer bank, payment card network, issuer, or 21

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any designee of the foregoing as part of the transaction’s authorization or 1
settlement process pursuant to subdivision (A) of this subdivision (2) may 2
submit tax documentation showing the tax and gratuity amount of the 3
transaction to the acquirer bank or its designee not later than 180 days after the 4
transaction. 5
(D) An acquirer bank, payment card network, issuer, or any designee 6
of the foregoing that receives tax documentation from a merchant pursuant to 7
subdivision (C) of this subdivision (2) shall, not later than 30 days after 8
receiving the tax documentation, credit the merchant for the amount in 9
interchange fees that were collected on the tax and gratuity amount of the 10
transaction. 11
(3) A merchant that submits an amount of tax or gratuity of a transaction 12
that is inaccurate shall provide the acquirer bank, payment card network, 13
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