Florida Senate - 2023 CS for SB 564 By the Committee on Banking and Insurance; and Senator Hutson 597-02621-23 2023564c1 1 A bill to be entitled 2 An act relating to interchange fees on taxes; creating 3 s. 501.0119, F.S.; defining terms; providing 4 applicability; prohibiting issuers, payment card 5 networks, acquirer banks, and processors from 6 receiving or charging merchants interchange fees on 7 the tax amounts of electronic payment transactions if 8 the merchant provides certain information in a 9 specified manner; requiring an issuer to credit a 10 merchant the amount of interchange fees on taxes 11 within a certain timeframe if the merchant meets 12 certain conditions; providing a civil penalty; 13 providing an effective date. 14 15 Be It Enacted by the Legislature of the State of Florida: 16 17 Section 1. Section 501.0119, Florida Statutes, is created 18 to read: 19 501.0119 Interchange fees on taxes prohibited.— 20 (1) As used in this section, the term: 21 (a) “Acquirer bank” means a member of a payment card 22 network which contracts with a merchant for the settlement of 23 electronic payment transactions. An acquirer bank may contract 24 directly with merchants or indirectly through a processor to 25 process electronic payment transactions. 26 (b) “Clearance” means the process of transmitting final 27 transaction data from a merchant to an issuer for posting to the 28 cardholder’s account and the calculation of fees and charges, 29 including interchange fees, which apply to the issuer and 30 merchant. 31 (c) “Credit card” means a card, plate, coupon book, or 32 other credit device existing for the purpose of obtaining money, 33 property, labor, or services on credit. 34 (d) “Debit card”: 35 1. Means a card, or other payment code or device, issued or 36 approved for use through a payment card network to debit an 37 asset account, regardless of the purpose for which the account 38 is established, whether authorization is based on a signature, a 39 personal identification number, or other means; 40 2. Includes a general-use prepaid card, as defined in 15 41 U.S.C. s. 1693l-1; and 42 3. Excludes paper checks. 43 (e) “Electronic payment transaction” means a transaction in 44 which a person uses a debit card, credit card, or other payment 45 code or device issued or approved through a payment card network 46 to debit a deposit account or use a line of credit, whether 47 authorization is based on a signature, a personal identification 48 number, or other means. 49 (f) “Interchange fee” means a fee established, charged, or 50 received by a payment card network for the purpose of 51 compensating the issuer for its involvement in an electronic 52 payment transaction. 53 (g) “Issuer” means a person issuing a debit card or credit 54 card or the issuer’s agent. 55 (h) “Merchant” has the same meaning as the term “dealer” in 56 s. 212.06(2). 57 (i) “Payment card network” means an entity: 58 1. That directly or through licensed members, processors, 59 or agents provides the proprietary services, infrastructure, and 60 software that routes information and data to conduct electronic 61 payment transaction authorization, clearance, and settlement; 62 and 63 2. That a merchant uses to accept as a form of payment a 64 brand of debit card, credit card, or other device that may be 65 used to carry out electronic payment transactions. 66 (j) “Processor” means an entity that facilitates, services, 67 processes, or manages the debit or credit authorization, 68 billing, transfer, payment procedures, or settlement with 69 respect to any electronic payment transaction. 70 (k) “Settlement” means the process of transmitting sales 71 information to the issuing bank for collection and reimbursement 72 of funds to the merchant and calculating and reporting the net 73 transaction amount to the issuer and merchant for an electronic 74 payment transaction that is cleared. 75 (l) “Tax” means all taxes and fees levied under chapter 212 76 and s. 125.0104. 77 (m) “Tax documentation” means documentation sufficient for 78 the payment card network to determine the total amount of the 79 electronic payment transaction and the tax amount of such 80 transaction. Tax documentation may be related to a single 81 electronic payment transaction or multiple electronic payment 82 transactions aggregated over a period of time. Examples of tax 83 documentation include, but are not limited to, invoices, 84 receipts, journals, ledgers, and tax returns filed with the 85 Department of Revenue or local taxing authorities. 86 (2) This section does not apply to an electronic payment 87 transaction in which the tax amount is not separately stated on 88 the consumer’s payment invoice, sales slip, or other evidence of 89 sale as required under s. 212.07(2). 90 (3) Except as provided in subsection (2), an issuer, a 91 payment card network, an acquirer bank, or a processor may not 92 receive or charge the merchant any interchange fees on the tax 93 amount of an electronic payment transaction if the merchant 94 informs the acquirer bank, its designee, or any other entity as 95 provided in the payment card network’s terms and conditions of 96 service of such tax amount as part of the clearance process for 97 the electronic payment transaction. A merchant must transmit the 98 tax amount data as part of the clearance process to avoid being 99 charged interchange fees on the tax amount of an electronic 100 payment transaction. 101 (4) A merchant that does not transmit the tax amount data 102 in accordance with subsection (3) may submit tax documentation 103 for the electronic payment transaction to the acquirer bank, its 104 designee, or any other entity as provided in the payment card 105 network’s terms and conditions of service no later than 180 days 106 after the date of the electronic payment transaction, and within 107 30 days, the issuer must credit to the merchant the amount of 108 interchange fees charged on the tax amount of the electronic 109 payment transaction. 110 (5) An issuer, a payment card network, an acquirer bank, a 111 processor, or other designated entity that has received the tax 112 amount data and violates this section is subject to a civil 113 penalty of $1,000 per electronic payment transaction, and the 114 issuer must refund the merchant the interchange fee calculated 115 on the tax amount relative to the electronic payment 116 transaction. 117 Section 2. This act shall take effect October 1, 2023.