About the Alliance – Why?
Learn More About the Issue of Swipe Fee Fairness
Connecticut’s merchants – restaurants, retail stores, hotels and motels – collect sales tax for the state.
These Connecticut businesses bring in hundreds of billions of dollars in state revenue each year.
Vendors’ Compensation
Many states allow tax-collecting merchants to keep a small portion of collected sales tax to cover expenses (software and labor) associated with serving as tax collectors fro the state; however, Connecticut is one of the few states that does not reimburse merchants for collecting sales tax. The CT Alliance for Swipe Fee Fairness does not believe vendor compensation is a solution, as that simply takes money out of the pocket of taxpayers. For decades, Connecticut’s merchants have collected sales tax revenue with no reimbursement for expenses.
Let’s Axe the Sales Tax in Swipe Fees!
As credit and debit card usage has increased, so have interchange fees charged to retailers by the card companies, also known as swipe fees. Retailers generally pay between 2% to 4% in swipe fees on a credit card transaction – fees that exceed the industry profit margin. The swipe fee is calculated as a percentage of the transaction — the entire transaction, including sales tax. We believe that charging the swipe fee on the sales tax portion of purchases is unfair and levies more than $110,000,000 in added costs to our state’s local businesses. In 2021, 76% of consumer transactions were either credit or debit, and U.S. retailers paid more than $10 billion on the sales tax portion of interchange fees alone. “Credit and debit card swipe fees” – which, according to the Merchants Payments Coalition, “have doubled over the past decade and soared 25 percent to a record $137.8 billion last year – are most merchants’ highest operating cost after labor.”
Swipe Fees on Sales Tax Punish You and Boost Credit Card Companies!
Swipe fees should be calculated on the amount of purchase BEFORE sales tax is added. That’s over $110 million that Connecticut merchants could keep in our state rather than going to out-of-state or even out-of-country banks. Retail merchants and restaurants already operate on very thin margins, and with inflation, simply raising prices to cover the increasing costs of these fees is not viable. It is simply not right that Connecticut’s merchants pay a cost because they are required by the state to collect sales tax; while the card companies benefit greatly from these added fees on sales tax. CT merchants pay credit card companies more than $100 million a year for the privilege of collecting state sales tax!
The CT Alliance for Swipe Fees Fairness
Join this coalition of Connecticut businesses to demand Swipe Fee Fairness. Add your voice to those demanding that credit and debit card companies not be allowed to charge interchange fees on sales tax. Join the Alliance!
