Call to Action: Pennsylvania House Finance Committee to Vote on Interchange Legislation 

Contact Your Representative Today 

The Pennsylvania House Finance Committee (Committee) is expected to consider legislation that will remove sales tax from interchange calculations. Removing sales tax from interchange calculations would be a major interruption in a payments system that works well.  

CrossState Credit Union Association, the PA Bankers Association, the PA Association of Community Bankers, with the support of the Electronic Payments Coalition, have been educating House Leadership, the Committee, and other legislative offices about the negative impact the legislation will have on consumers, small businesses, and main street financial institutions.  

Credit unions are asked to contact their member(s) of the Committee today. Tell them to “Vote No” on the legislation. 

Concerns About the Legislation:

• Current systems do not have the capability to identify and remove the sales tax percentages from the total transaction cost. 
• Creating a system to uniquely account for the sales tax percentage of each local jurisdiction in Pennsylvania will take years and increase the cost of operating an electronic payment point of sale terminal – a cost of doing business that retailers routinely pass along to consumers. 
• Research shows 93% of consumers are happy with their credit and debit cards. These requirements put customer benefits such as airline miles, cash back, and travel points at risk. 
• Consumers use cards because they are quick, convenient, and significantly reduce the opportunity for fraud as compared to cash or check transactions. These card benefits are all compromised with the proposed legislation to change the card processing system. A change that would set Pennsylvania apart from every other state in the nation. 
• There is no benefit to Pennsylvania in removing sales tax from the interchange fee calculation. 
• The cost of implementation in Pennsylvania is one of many unknowns. It’s not certain if card processors can develop the necessary technology infrastructure to exempt sales tax and gratuity from interchange fee calculations or how long it will take.