Every time a consumer (you and me) swipes a debit or credit card, out-of-state credit card companies and banks charge Florida businesses interchange fees, also known as “swipe fees,” the amount charged comes on the total amount of a purchase, including the sales tax.
Again, this includes both the price of the item being sold and, the state-imposed sales taxes that merchants are required to collect and remit for every purchase.
These fees, which usually range from 2 to 4% of the total amount charged on every transaction and are paid directly by Florida merchants to the card companies and issuing banks – who end up making a profit.
Banks have a whole lot of money, and even with the downward turn of the national economy, banks are reporting recorded profits, some financial institutions like JP Morgan Chase even reported an astronomical 52% profit as a result of higher interest rates.
Chase, along with Citigroup, BlackRock, State Street, Wells Fargo, and many other ESG-supporting banks, or as DeSantis and conservatives refer to, “Woke” banks,” are raking huge profits off of those interchange fees.
Considering how not-so-woke DeSantis and the Florida Legislature have been, Florida should be supporting consumers and small businesses by telling credit card companies to stop making money on the backs of hard-working Floridians.
In fact, from July 2021 to June 2022, credit card companies and banks collected more than $288 million from merchants just on the sales tax portion alone.
That is why in February, State Senator Travis Hutson (R-FL) filed SB 564, Interchange Fees on Taxes Bill to keep the credit card companies and banks from charging a hidden fee on state-mandated taxes. The measure is now making its way to the House Floor and has one more stop in the Senate.
The proposed legislation would prohibit processors (credit card companies) from charging fees on the sales tax portion of a sale – something that the state mandates that merchants collect and remit. This bill would only allow credit card companies and banks to only charge a swipe fee on the subtotal of the transaction.
For instance, if someone buys a bicycle using a credit card that costs $100, and the grand total to the consumer comes out to $106 after sales tax, the processor would only be able to charge the swipe fee on the $100, not the $106.
That makes sense, right?
The Floridian was able to get an exclusive interview with Sen. Hutson on his consumer-friendly bill.
“They’re taxing a tax,” stated Sen. Hutson. “And unfortunately, what’s going to happen is the retailer has to make up for that. And it’s going to be a hidden tax on consumers when they try and make up for it on the back end of the price sales of their merchandise.”
We asked how long these “hidden fees” have been occurring, and whether it is happening now.
“This is currently occurring, and it’s been occurring for years, and many states are starting to realize this and they’re starting to get something across the finish line. I think 20 some states that filed this and a handful of them did not pass them,” said Sen. Hutson.
Processors generally charge around a 3.5% fee on the grand total, which in some instances may come to just “pennies” per transaction as Sen. Hutson described to us. However, with large amounts of transactions daily that the credit card companies account for, those numbers start to tally up.
“It equates to pennies,” Hutson mentioned. “But when you add up 1000s of transactions a day, it adds up and if you look at our analysis, it’s about $280 million a year that the retailers are getting hit for and ultimately, it’s going back on the consumers because the retailers somehow have to make up that profit loss.”
We asked Sen. Hutson what everyday Floridians should take from this bill and why Florida residents should support it.
“To me it’s very simple: This is a tax on a tax that is already happening. It’s baked in right now. And I want to give the relief to the retailers who can ultimately turn around and give it to the consumers of Florida.”
In March, the bill passed in the Banking and Insurance Committee by a nine to two vote. Earlier this month, it passed by a vote of seven to two in the Commerce and Tourism Committee.
The companion bill, HB 677 was introduced by State Representative Mike Caruso (R-FL). It was recently added to the House calendar.
Publisher Javier Manjarres contributed to this article.
