Kansas2026Passed Legislature
HB2089
Consumer Inflation Reduction and Tax Fairness Act
Last scannedAug 24, 2026, 9:52 AM
In one sentence
This bill stops credit card companies from charging fees on the tax or tip parts of a purchase if merchants report those amounts correctly.
What it does
- Prohibits issuers, payment networks, acquirer banks, and processors from charging interchange fees on sales taxes included in electronic transactions when reported by the merchant.
- Prohibits charging interchange fees on gratuities (tips) added to credit or debit card payments when reported by the merchant.
- Allows merchants to send tax or tip data during the transaction authorization or settlement process to avoid these extra costs immediately.
- Gives merchants 180 days after a sale to submit proof of taxes and tips if they did not report them at the time of the transaction.
- Requires issuers to credit (refund) any fees wrongly charged on taxes or tips within 30 days after receiving merchant documentation.
Who it affects
- Merchants who collect sales tax or receive tips from customers using cards.
- Issuers, payment card networks, acquirer banks, and processors that handle electronic payments.
- Cardholders whose transactions include taxes or gratuities processed through these systems.
Limits and unknowns
- The bill does not create liability for payment networks if the tax or gratuity data reported by merchants is inaccurate.
- Merchants must report tax and tip amounts during authorization to avoid fees; otherwise, they face an extra step of submitting documentation later.
Plain language
Terms to know
- Interchange fee
- A charge paid by merchants to the bank issuing a credit card for processing an electronic payment transaction, established by the payment network.
- Acquirer bank
- The financial institution that contracts with a merchant to settle and process their electronic payments.
- Gratuity
- A voluntary monetary contribution given by a customer to an employee for services provided, such as a tip at a restaurant.
Official record
Sources
Official summary
Enacting the consumer inflation reduction and tax fairness act and exempting the portion of a credit card transaction constituting a tax or gratuity from assessment of the fee charged by the card issuer.
Official activity
Bill history
- Died in CommitteeHouse
- Referred to House Committee on Financial Institutions and PensionsHouse
- IntroducedHouse