HB431: HB431 Consumer Inflation Reduction and Tax Fairness Act; enact

When a customer pays with a credit or debit card, the retailer's bank or the card network typically charges an interchange fee, a percentage of the total transaction, including any sales tax collected. This bill, called the Consumer Inflation Reduction and Tax Fairness Act, would add a new section to Georgia's Fair Business Practices Act (O.C.G.A. § 10-1-393.20) requiring payment card networks to base interchange fees only on the actual price of goods or services, not on the taxes added at checkout. Card networks would have to either exclude taxes from the fee calculation at the time of sale or refund the tax-related portion of the fee to the retailer at least quarterly. If a retailer cannot or does not report taxes at the time of sale, the network would not have to exclude taxes upfront but would still owe a quarterly refund once the retailer provides proof of taxes collected. A network that willfully violates the rule would owe the retailer the improperly charged fees plus a 10 percent penalty, and the bill also bans manipulating fee rates to get around this requirement.

• Bars payment card networks from charging retailers an interchange fee based on more than the actual goods and services price, excluding sales and use taxes.
• Requires card networks to either exclude taxes from the fee calculation at checkout or refund the tax-related fee amount to retailers at least once a quarter.
• Allows card networks to skip excluding taxes upfront if a retailer does not capture and transmit tax data at the time of sale, but still requires a later refund once proof of taxes is provided.
• Creates a civil penalty equal to the wrongly charged interchange fees on taxes plus 10 percent for networks that willfully violate the rule.
• Makes it illegal to manipulate interchange fee rates on the non-tax portion of a transaction as a way to get around the law.

The bill affects payment card networks like Visa and Mastercard, the banks that issue credit and debit cards, and retailers of all sizes operating physical or online locations in Georgia. Georgia consumers who pay with cards are affected indirectly, since fees on their purchases are the basis for the dispute.

Retailers currently pay interchange fees calculated on the full purchase amount, including sales tax that never reaches them as revenue. If enacted, retailers would keep more of each sale by avoiding fees on tax dollars they simply collect and pass to the state, which could affect retailer costs and, potentially, prices.

• Section 1 names the bill the Consumer Inflation Reduction and Tax Fairness Act.
• Section 2 adds new Code section 10-1-393.20 to the Fair Business Practices Act of 1975, defining key terms including 'interchange fee,' 'payment card network,' and 'goods and services consumer purchase price.'
• Subsection (b) prohibits interchange fees based on more than the actual price of goods or services, excluding taxes.
• Subsection (c) requires networks to exclude taxes from fee calculations or refund the tax-related fee amount at least quarterly.
• Subsection (d) addresses cases where a retailer fails to report tax data at time of sale, still requiring a later refund upon proof of taxes collected.
• Subsection (e) sets a civil penalty for willful violations equal to the improperly charged fees on taxes plus 10 percent.
• Subsection (f) bans manipulating interchange fee rates to circumvent the law's effect.
• Section 3 repeals conflicting laws.

1. 2025-02-18House Second Readers (House)
2. 2025-02-13House First Readers (House)
3. 2025-02-12House Hopper (House)

• Todd Jones (R, HD-025)Primary sponsor
• Alan Powell (R, HD-033)
• Jason Ridley (R, HD-006)
• James Hatchett (R, HD-155)
• John Corbett (R, HD-174)
• Beth Camp (R, HD-135)

• credit card fees
• retail regulation
• sales tax
• consumer protection
• payment processing