AN ACT RELATING TO COMMERCIAL LAW--GENERAL REGULATORY PROVISIONS -- SWIPE FEES (Prohibits the charging of swipe fees on taxes and gratuities.)

H7607

2026 -- H 7607
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LC004939
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STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2026
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A N A C T
RELATING TO COMMERCIAL LAW--GENERAL REGULATORY PROVISIONS -- SWIPE
FEES

Introduced By:
Representatives McEntee, Caldwell, Fogarty, Spears, Shallcross Smith,
Phillips, Cortvriend, Costantino, Voas, and Casey

Date Introduced:
February 11, 2026

Referred To:
House Corporations
It is enacted by the General Assembly as follows:
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SECTION 1. Title 6 of the General Laws entitled "COMMERCIAL LAW — GENERAL
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REGULATORY PROVISIONS" is hereby amended by adding thereto the following chapter:
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CHAPTER 26.2
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SWIPE FEES
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6-26.2-1. Definitions.

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As used in this chapter, the following terms shall have the following meanings:
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(1) "Assessment fee" means a fee paid to the payment card network for allowing a merchant
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to use a payment card or other payment code or device in an electronic payment transaction.
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(2) "Electronic payment transaction" means a transaction in which a person uses a payment
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card or other payment code or device issued or approved through a payment card network to debit
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a deposit account or use a line of credit, whether authorization is based on a signature, personal
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identification number, or other means.
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(3) "Gratuity" means a voluntary monetary contribution to an agent of a merchant from a
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guest, patron, or customer in connection with services rendered.
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(4) "Interchange fee" means a fee charged to a merchant for the purpose of compensating
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the payment card issuer for the issuer’s involvement in an electronic payment transaction.
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(5) "Payment card" means a credit card, debit card, check card, or other card that is issued
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to an authorized user to purchase or obtain goods, services, money, or any other thing of value.

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(6) "Payment card issuer" means a lender, including a financial institution, or a merchant
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that receives applications and issues payment cards to individuals.
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(7) "Payment card network" means an entity that directly, or through a licensed member,
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processor, or agent, provides the proprietary services, infrastructure, and software that route
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information and data to conduct debit card or credit card transaction authorization, clearance, and
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settlement and that an entity uses in order to accept as a form of payment a brand of debit card,
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credit card, or other device that may be used to carry out debit or credit transactions.
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(8) "State or local tax" means any sales, use, occupancy, or excise tax imposed by the state
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or a political subdivision thereof.
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(9) "Swipe fee" means the interchange fee and, if applicable, the assessment fee.
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6-26.2-2. Exclusion of state or local taxes and gratuity from swipe fees -- Merchant
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deduction or rebate.

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(a) The amount of state or local tax that is calculated as a percentage of the amount of an
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electronic payment transaction made in this state and gratuity that is listed separately on a payment
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invoice or other demand for payment shall be excluded from the total amount on which a swipe fee
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is charged for that transaction.
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(b) A payment card network shall, with respect to each form or type of electronic payment
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transaction:
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(1) Deduct the amount of state or local tax imposed and gratuity from the calculation of
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swipe fees attributable to the transaction at the time of settlement; or
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(2) Rebate the merchant an amount equal to the amount of swipe fees attributable to the
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state or local tax imposed and gratuity on the transaction.
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(c) A deduction or rebate under this section shall occur at the time of settlement when the
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merchant is able to capture and transmit state or local tax or fee amounts and gratuity relevant to
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the sale at the time of sale as part of the transaction finalization. If a merchant is unable to capture
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and transmit tax or fee and gratuity amounts relevant to the sale at the time of sale, then the payment
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card network shall accept proof of tax or fee amounts and gratuity collected on sales subject to a
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swipe fee on the submission of sales data by the merchant and provide the rebate no later than one
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hundred eighty (180) days after the date of the electronic payment transaction, and, within thirty
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(30) days after the merchant submits the sales data.
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(d) This section shall not create liability for a payment card network regarding the accuracy
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of the tax or gratuity data reported by the merchant.
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(e) It shall be unlawful for a payment card issuer or a payment card network to alter or
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manipulate the computation and imposition of swipe fees by increasing the rate or amount of the

LC004939 - Page 2 of 4
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fees applicable to or imposed upon the portion of an electronic payment transaction not attributable
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to taxes or gratuities to circumvent the effect of this section.
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6-26.2-3. Penalties.

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(a) A person who violates this chapter shall be subject to a civil penalty not to exceed one
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thousand dollars ($1,000) for each violation.
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(b) The attorney general:
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(1) May bring an action to recover the civil penalty imposed under this section;
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(2) May obtain a temporary or permanent injunction to restrain the violation; and
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(3) Shall deposit a civil penalty collected under this section in the state treasury to the credit
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of the general revenue fund.
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(c) A person who violates this chapter shall refund a merchant any swipe fees charged in
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violation of this chapter.
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6-26.2-4. Severability.

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If any of the provisions of this chapter are held invalid, the remainder shall not be affected
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as a result; nor shall the application of the provision held invalid to persons or circumstances other
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than those as to which it is held invalid be affected as a result.
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SECTION 2. This act shall take effect on January 1, 2027.
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO COMMERCIAL LAW--GENERAL REGULATORY PROVISIONS -- SWIPE
FEES
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This act would prohibit the charging of swipe fees on taxes and gratuities.
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This act would take effect on January 1, 2027.
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LC004939
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