Bill Description: Senate Bill 1055 would impose costly new regulations on companies that provide credit and debit card processing services in Idaho.
Rating: -2
NOTE: Senate Bill 1055 is related to Senate Bill 1066 from 2023 and Senate Bill 1293 from 2022. Compared to those earlier bills, Senate Bill 1055 is worse, seeking to impose even more costly regulations.
Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market?
Senate Bill 1055 would create Section 63-3643, Idaho Code, to impose new regulations on companies that provide credit and debit card processing services in Idaho. Under this new law, such companies would be prohibited from charging their normal percentage fee on the portion of a credit or debit card transaction that is a tax. This includes sales and use taxes, hotel and motel room sales taxes, fuel taxes, and cigarette and tobacco product taxes.
(-1)
Senate Bill 1055 would go further than similar bills introduced in earlier legislative sessions. It would prevent payment processing services from charging their normal percentage fee on the portion of a credit or debit card transaction that is a gratuity.
These companies would be required to either "deduct the amount of any tax and gratuity imposed from the calculation of interchange fees specific to each form or type of electronic payment transaction at the time of settlement" or "rebate an amount of interchange fee proportionate to the amount attributable to the tax and gratuity."
In addition to being new regulations, these mandates ignore the nature of the businesses being regulated. That some part of a transaction is dedicated to taxes or tips does not change how the transaction is processed. Two transactions of $100 each require the same amount of sources to process, even if one has a $10 tip and the other has a $20 tip, or one includes $3 in sales tax and the other includes $4 in sales.
This bill is notably worse than its predecessors because it applies to gratuities, which in some industries represent a significant portion of the total transaction.
These regulations would require national payment processors to implement specific calculation or rebate procedures for transactions processed in Idaho. This increases costs for transaction processors and could discourage them from doing business in the state.
(-1)
