SB125 Alabama 2023 Session

Summary

Primary Sponsor

Merika ColemanSenator

Democrat

Session

Regular Session 2023

Title

Relating to credit and debit card fees; to provide that the calculation of any credit or debit card swipe fee may not include taxes and fees added on to the price of the goods or services purchased by the credit or debit card.

Summary

SB125 would require that credit and debit card swipe fees exclude taxes and fees added to purchases, and require networks to adjust interchange fees accordingly with penalties for violations.

What This Bill Does

If passed, the bill prevents state and local taxes and certain fees from being included when calculating swipe fees. It requires payment card networks to either deduct the tax/fee amount from interchange fees or rebate that amount at settlement, and to accept proof of those amounts if merchants cannot capture them at sale. The bill also imposes liability, including potential damages and legal costs, on networks that violate the rule, and it sets an effective date after passage and governor approval.

Who It Affects

• Merchants and sellers who incur swipe fees, as their interchange charges may be reduced by the excluded taxes/fees and settlement practices may require additional documentation.
• Payment card networks and issuers, which must implement the deduction or rebate of taxes/fees and may face liability and damages for violations.

Key Provisions

• Taxes and fees collected at the time of payment must be excluded from the basis for calculating swipe fees.
• Networks must either deduct the tax/fee amount from interchange fees at settlement or rebate a proportional amount to the tax/fee.
• If a merchant cannot capture tax/fee data at sale, networks must accept proof of tax/fee amounts and credit the merchant at settlement.
• Violations by a payment card network expose it to liability for the charged interchange fees, punitive damages up to $1,000 per violation, court costs, and reasonable attorney fees.
• The act becomes effective on the first day of the third month after passage and governor approval.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.