Senate Bill 2856

AN ACT TO CREATE THE RETAILER TAX FAIRNESS ACT; TO DEFINE TERMS; TO EXCLUDE THE AMOUNT OF CERTAIN STATE AND LOCAL TAXES AND FEES FROM THE AMOUNT ON WHICH AN INTERCHANGE FEE IS CHARGED FOR AN ELECTRONIC PAYMENT TRANSACTION; TO REQUIRE A PAYMENT CARD NETWORK EITHER TO DEDUCT THE AMOUNT OF ANY TAX IMPOSED FROM THE CALCULATION OF INTERCHANGE FEES SPECIFIC TO EACH FORM OR TYPE OF ELECTRONIC PAYMENT TRANSACTION AT THE TIME OF SETTLEMENT, OR TO REBATE PROMPTLY AN AMOUNT OF INTERCHANGE FEE PROPORTIONATE TO THE AMOUNT ATTRIBUTABLE TO THE TAX OR FEE; TO PROVIDE THAT A PAYMENT CARD NETWORK THAT VIOLATES THIS ACT SHALL BE SUBJECT TO A CIVIL PENALTY OF NOT MORE THAN $1,000.00 PER VIOLATION, PAYABLE TO THE PLAINTIFF, AND SHALL REFUND THE SURCHARGE TO EACH MERCHANT OR SELLER; TO PROHIBIT THE ALTERATION OR MANIPULATION OF THE COMPUTATION AND IMPOSITION OF INTERCHANGE FEES BY INCREASING THE RATE OR AMOUNT OF THE FEE APPLICABLE TO OR IMPOSED UPON THAT PORTION OF AN ELECTRONIC PAYMENT TRANSACTION NOT ATTRIBUTABLE TO A STATE OR LOCAL TAX OR FEE TO CIRCUMVENT THE EFFECT OF THIS ACT; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. This act shall be known and may be cited as the "Retailer Tax Fairness Act."

SECTION 2. For purposes of this act:

(a) "Credit card" means any card, plate, coupon book or other credit device existing for the purpose of obtaining money, property, labor or services on credit.

(b) "Debit card":

(i) Means any card, or other payment code or device, issued or approved for use through a payment card network to debit an asset account, regardless of the purpose for which the account is established, whether authorization is based on signature, personal identification number or other means;

(ii) Includes a general-use prepaid card, as defined in 15 USC Section 1693l-1(a)(2)(A); and

(iii) Does not include paper checks.

(c) "Electronic payment transaction" means a transaction in which a person uses a debit card, credit card or other payment code or device, issued or approved through a payment card network, to debit a deposit account or use a line of credit, whether authorization is based on a signature, personal identification number or other means.

(d) "Interchange fee" means a fee established, charged or received by a payment card network for the purpose of compensating the issuer for its involvement in an electronic payment transaction.

(e) "Issuer" means a person issuing a debit card or credit card, or the issuer's agent.

(f) "Payment card network" means an entity that:

(i) Directly, or through licensed members, processors or agents, provides the proprietary services, infrastructure and software that routes information and data to conduct debit card or credit card transaction authorization, clearance and settlement; and

(ii) A merchant or seller uses in order to accept as a form of payment a brand of debit card, credit card or other device that may be used to carry out debit or credit transactions.

(g) "Settlement" means the transfer of funds from a customer's account to a seller or merchant upon electronic submission of finalized sales transactions to the payment card network.

SECTION 3. (1) The amount of any state and local taxes and fees that are calculated as a percentage of an electronic payment transaction amount and listed separately on the payment invoice or other demand for payment, including the amount of any taxes imposed under Title 27, Chapter 65, Mississippi Code of 1972, and any tax levied and collected under the authority of any local and private law of the State of Mississippi upon hotels, motels, restaurants or otherwise, must be excluded from the amount on which an interchange fee is charged for that electronic payment transaction.

(2) There shall be excluded from the amount on which an interchange fee is charged the amount of all state taxes and fees imposed under Sections 27-55-11, 27-55-519, 27-59-11, 49-17-407 and 65-33-47.

SECTION 4. A payment card network shall either deduct the amount of any tax imposed from the calculation of interchange fees specific to each form or type of electronic payment transaction at the time of settlement, or rebate an amount of interchange fee proportionate to the amount attributable to the tax or fee.

Any deduction or rebate must occur at the time of settlement, when the merchant or seller is able to capture and transmit tax or fee amounts relevant to the sale at the time of sale as part of the transaction finalization.

If a merchant or seller is unable to capture and transmit tax or fee amounts relevant to the sale at the time of sale, the payment card network shall accept proof of tax or fee amounts collected on sales subject to an interchange fee upon the submission of sales data by the merchant or seller and promptly credit the merchant or seller's settlement account.

SECTION 5. A payment card network that violates this act shall be subject to a civil penalty of not more than One Thousand Dollars ($1,000.00) per violation, payable to the plaintiff, and shall refund the surcharge to each merchant or seller.

SECTION 6. It shall be unlawful to alter or manipulate the computation and imposition of interchange fees by increasing the rate or amount of the fee applicable to or imposed upon that portion of an electronic payment transaction not attributable to a state or local tax or fee to circumvent the effect of this act.

SECTION 7. This act shall take effect from and after July 1, 2021.