HB 431: Consumer Inflation Reduction and Tax Fairness Act; enact

When a customer pays with a credit or debit card, the payment card network (like Visa or Mastercard) charges retailers an interchange fee, usually a percentage of the total transaction amount, including sales tax. This bill would stop that practice in Georgia by requiring payment card networks to calculate interchange fees only on the actual price of goods or services purchased, not on the taxes added to the sale. Payment card networks would have to either exclude taxes from the fee calculation at the time of the transaction, or refund the tax-related portion of fees to retailers at least quarterly. If a retailer doesn't provide tax information at checkout, the network isn't required to exclude taxes upfront but must refund the difference once given proof of taxes collected. Networks that willfully violate the law face a civil penalty equal to the improperly charged fees plus 10 percent. The bill also bans networks from manipulating fee rates to get around these rules. It amends Georgia's Fair Business Practices Act of 1975 by adding a new Code section, and is titled the 'Consumer Inflation Reduction and Tax Fairness Act.'

• Prohibits payment card networks from charging retailers interchange fees calculated on the tax portion of a credit or debit card sale, limiting fees to the goods and services price.
• Requires payment card networks to either exclude taxes from fee calculations at the time of sale or refund the tax-related fee amount to retailers at least quarterly.
• Allows payment card networks to skip excluding taxes upfront if a retailer doesn't provide tax data, but still requires a refund once the retailer supplies proof of taxes collected.
• Imposes a civil penalty on payment card networks that willfully violate the rule, equal to the wrongly charged fees for the year plus 10 percent.
• Makes it illegal for a payment card network to raise or manipulate interchange fee rates on the non-tax portion of a transaction in order to get around this new limit.

Retailers operating physical or online locations in Georgia that accept credit or debit cards, payment card networks such as major card companies, payment card issuers, and ultimately consumers who make card purchases, since interchange fee costs can affect retailer pricing.

If enacted, retailers in Georgia would no longer pay interchange fees on the sales tax portion of card transactions, potentially lowering their processing costs. Payment card networks would need new systems to track and refund tax-related fees, and violations could bring financial penalties.

• Section 1 names the bill the 'Consumer Inflation Reduction and Tax Fairness Act.'
• Section 2 adds new Code section 10-1-393.20 defining key terms including 'interchange fee,' 'payment card network,' 'retailer,' and 'taxes.'
• Subsection (b) bars payment card networks from applying interchange fees to any amount greater than the goods and services purchase price, excluding taxes.
• Subsection (c) requires networks to exclude taxes from fee calculations or refund the tax-related fee amount to retailers at least quarterly.
• Subsection (d) addresses cases where retailers don't provide tax data at time of sale, still requiring quarterly refunds once proof of taxes is given.
• Subsection (e) sets a civil penalty for willful violations: the improperly charged fees for the year plus 10 percent.
• Subsection (f) makes it unlawful to manipulate interchange fee rates to circumvent the tax exclusion requirement.
• 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)

• interchange fees
• credit card fees
• consumer protection
• retail costs
• sales tax