Florida Senate - 2023 CS for CS for SB 564 By the Committees on Commerce and Tourism; and Banking and Insurance; and Senator Hutson 577-03479-23 2023564c2 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) “Authorization” means the process through which a 27 merchant requests approval for an electronic payment transaction 28 from the issuer. 29 (c) “Clearance” means the process of transmitting final 30 transaction data from a merchant to an issuer for posting to the 31 cardholder’s account and the calculation of fees and charges, 32 including interchange fees, which apply to the issuer and 33 merchant. 34 (d) “Credit card” means a card, plate, coupon book, or 35 other credit device existing for the purpose of obtaining money, 36 property, labor, or services on credit. 37 (e) “Debit card”: 38 1. Means a card, or other payment code or device, issued or 39 approved for use through a payment card network to debit an 40 asset account, regardless of the purpose for which the account 41 is established, whether authorization is based on a signature, a 42 personal identification number, or other means; 43 2. Includes a general-use prepaid card, as defined in 15 44 U.S.C. s. 1693l-1; and 45 3. Excludes paper checks. 46 (f) “Electronic payment transaction” means a transaction in 47 which a person uses a debit card, credit card, or other payment 48 code or device issued or approved through a payment card network 49 to debit a deposit account or use a line of credit, whether 50 authorization is based on a signature, a personal identification 51 number, or other means. 52 (g) “Interchange fee” means a fee established, charged, or 53 received by a payment card network for the purpose of 54 compensating the issuer for its involvement in an electronic 55 payment transaction. 56 (h) “Issuer” means a person issuing a debit card or credit 57 card or the issuer’s agent. 58 (i) “Merchant” has the same meaning as the term “dealer” in 59 s. 212.06(2). 60 (j) “Payment card network” means an entity: 61 1. That directly or through licensed members, processors, 62 or agents provides the proprietary services, infrastructure, and 63 software that route information and data to conduct electronic 64 payment transaction authorization, clearance, and settlement; 65 and 66 2. That a merchant uses to accept as a form of payment a 67 brand of debit card, credit card, or other device that may be 68 used to carry out electronic payment transactions. 69 (k) “Processor” means an entity that facilitates, services, 70 processes, or manages the debit or credit authorization, 71 billing, transfer, payment procedures, or settlement with 72 respect to any electronic payment transaction. 73 (l) “Settlement” means the process of transmitting sales 74 information to the issuing bank for collection and reimbursement 75 of funds to the merchant and calculating and reporting the net 76 transaction amount to the issuer and merchant for an electronic 77 payment transaction that is cleared. 78 (m) “Tax” means all taxes and fees levied under chapter 212 79 and s. 125.0104. 80 (n) “Tax documentation” means documentation sufficient for 81 the payment card network to determine the total amount of the 82 electronic payment transaction and the tax amount of such 83 transaction. Tax documentation may be related to a single 84 electronic payment transaction or multiple electronic payment 85 transactions aggregated over a period of time. Examples of tax 86 documentation include, but are not limited to, invoices, 87 receipts, journals, ledgers, and tax returns filed with the 88 Department of Revenue or local taxing authorities. 89 (2) This section does not apply to an electronic payment 90 transaction in which the tax amount is not separately stated on 91 the consumer’s payment invoice, sales slip, or other evidence of 92 sale as required under s. 212.07(2). 93 (3) Except as provided in subsection (2), an issuer, a 94 payment card network, an acquirer bank, or a processor may not 95 receive or charge the merchant any interchange fees on the tax 96 amount of an electronic payment transaction if the merchant 97 informs the acquirer bank or its designee of such tax amount as 98 part of the authorization process for the electronic payment 99 transaction. A merchant must transmit the tax amount data as 100 part of the authorization process to avoid being charged 101 interchange fees on the tax amount of an electronic payment 102 transaction. 103 (4) A merchant that does not transmit the tax amount data 104 in accordance with subsection (3) may submit tax documentation 105 for the electronic payment transaction to the acquirer bank or 106 its designee no later than 180 days after the date of the 107 electronic payment transaction, and within 30 days, the issuer 108 must credit to the merchant the amount of interchange fees 109 charged on the tax amount of the electronic 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.