SB316 Alabama 2021 Session

Summary

Primary Sponsor

Garlan GudgerSenator

Republican

Session

Regular Session 2021

Title

Debit and credit card swipe fee, exclude from fee calculation taxes and fees added on to purchase price

Summary

SB316 would exclude state and local taxes and certain fees added to purchases from the base used to calculate credit/debit card swipe fees.

What This Bill Does

The bill requires the calculation of credit/debit card swipe fees (interchange) to exclude taxes and fees charged to customers at the time of payment. Card networks must either deduct the tax/fee amount from interchange calculations or rebate an equivalent amount at settlement. If the merchant can capture tax/fee data at sale, the deduction or rebate occurs at settlement; if not, the network must accept proof of the tax/fee and credit the merchant later. The bill also provides penalties for networks that violate these rules and sets an effective date for when the law would take effect.

Who It Affects

• Merchants and sellers who accept credit or debit cards, who would see changes in swipe-fee amounts since taxes and fees would not be counted in the interchange fee calculation.
• Payment card networks and associated processors/issuers, which would be required to deduct or rebate tax/fee amounts from interchange fees and could face liability for violations.

Key Provisions

• Section 2: Taxes and fees added to the purchase price are excluded from the basis used to calculate interchange fees.
• Section 3: Payment card networks must either deduct the tax/fee amounts from interchange fees at settlement or rebate a proportional amount to the merchant.
• Section 3 (continued): If the merchant can capture and transmit tax/fee data at sale, deductions or rebates occur at settlement; if not, networks must accept proof of tax/fee and credit the merchant’s settlement.
• Section 4: Networks violating the act are liable for the amount of improper interchange fees, plus potential punitive damages, court costs, and attorney’s fees.
• Section 5: The act becomes effective on the first day of the third month after passage and approval.

AI-generated summary using openai/gpt-5-nano on Feb 23, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Credit Cards