DENVER -- Colorado retailers are seeking a first-in-the-nation exemption from having to pay credit-card interchange "swipe" fees on local taxes they collect under a bill introduced in the state legislature, reported The Denver Business Journal.
The proposal sets up a battle between businesses--who say they should not have to pay thousands of dollars per year to the banks that issue credits on tax revenues that they simply collect and pass through to the state--and Colorado bank executives who argue the bill essentially would require them to provide a service for free.
Dave Carpenter, who owns six 7-Eleven franchise convenience stores in the Denver area, said it's unfair for credit-card companies and banks to profit from transactional revenue that businesses don't get to keep. Active in the National Association of Convenience Stores (NACS), Carpenter said retailers discussed the issue when they pushed Congress for credit-card reform in recent years, but settled instead for a national cap on fees paid on debit cards.
The bill, sponsored by state representatives Jon Becker (R) and Alec Garnett (D), will try to make Colorado the first state in the country to prohibit fees on the portion of transactions that represent state and local taxes.
Carpenter said it could save small retailers like himself thousands of dollars per store per year, and that reduction of expenses could lead to a reduction in prices.
"We shouldn't have to pay for the privilege of collecting the state's taxes," he told the newspaper. "Yeah, [banks and credit-card companies] provide a service. And they charge an exorbitant amount for that service. ... It's not a solid way of doing business."
The coalition of backers for the bill include convenience stores, liquor stores and the National Federation of Independent Business. Proponents have been talking as well with large retailers, who could stand to save even more money if it were to pass.
"This will be the first of its kind, and I think it's be a great thing," Becker said, noting that a similar bill failed last year in Iowa. "It really shows, first of all, that Colorado is a very pro-business state and a very pro-consumer state."
Garnett said the bill also would prohibit credit-card issuers from increasing swipe fees on businesses to offset the loss of revenue from the new law.
Click here to view the full Business Journal report.
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