AN ACT RELATING TO COMMERCIAL LAW--GENERAL REGULATORY PROVISIONS -- INTERCHANGE FEE RESTRICTION ACT (Creates the interchange fee restriction act prohibiting interchange fees on sales and use tax or excise tax when payment is made with a credit or debit card.)

H8212

2026 -- H 8212
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LC005310
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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 --
INTERCHANGE FEE RESTRICTION ACT

Introduced By:
Representative Patricia A. Serpa

Date Introduced:
February 27, 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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INTERCHANGE FEE RESTRICTION ACT
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6-26.2-1. Short title.

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This chapter may be known and cited as the "Interchange Fee Restriction Act".
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6-26.2-2. Definitions.

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As used in this chapter:
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(1) "Acquirer bank" means a member of a payment card network that contracts with a
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merchant for the settlement of electronic payment transactions. An acquirer bank may contract
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directly with merchants or indirectly through a processor to process electronic payment
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transactions.
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(2) "Authorization" means the process through which a merchant requests approval for an
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electronic payment transaction from the issuer.
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(3) "Clearance" means the process of transmitting final transaction data from a merchant
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to an issuer for posting to the cardholder's account and the calculation of fees and charges, including
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interchange fees, that apply to the issuer and the merchant.
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(4) "Credit card" means a card, plate, coupon book, or other credit device existing for the

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purpose of obtaining money, property, labor, or services on credit.
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(5) "Debit card" means a card or other payment code or device issued or approved for use
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through a payment card network to debit an asset account, regardless of the purpose for which the
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account is established, whether authorization is based on a signature, a personal identification
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number, or other means. Debit card includes a general use prepaid card, as defined in 15 U.S.C.
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16931·1. Debit card does not include paper checks.
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(6) "Electronic payment transaction" means a transaction in which a person uses a debit
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card, a credit card, or other payment code or device issued or approved through a payment card
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network to debit a deposit account or use a line of credit, whether authorization is based on a
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signature, a personal identification number, or other means.
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(7) "Interchange fee" means a fee established, charged, or received by a payment card
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network for the purpose of compensating the issuer for its involvement in an electronic payment
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transaction.
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(8) "Issuer" means a person issuing a debit card or credit card or the issuer's agent.
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(9) "Merchant" means a person that collects and remits a tax.
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(10) "Payment card network" means an entity that:
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(i) Directly or through licensed members, processors, or agents, provides the proprietary
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services, infrastructure, and software to route information and data for the purpose of conducting
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electronic payment transaction authorization, clearance, and settlement; and
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(ii) A merchant uses to accept as a form of payment a brand of debit card, credit card, or
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other device that may be used to carry out electronic payment transactions.
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(11) "Person" means any individual, firm, public or private corporation, government,
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partnership, association, or any other organization or entity.
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(12) "Processor" means an entity that facilitates, services, processes, or manages the debit
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or credit authorization, billing, transfer, payment procedures, or settlement with respect to any
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electronic payment transaction.
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(13) "Settlement" means the process of transmitting sales information to the issuing bank
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for collection and reimbursement of funds to the merchant and calculating and reporting the net
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transaction amount to the issuer and merchant for an electronic payment transaction that is cleared.
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(14) "Tax" means any sales and use tax or excise tax imposed by the state or a municipality.
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(15) "Tax documentation" means documentation sufficient for the payment card network
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to determine the total amount of the electronic payment transaction and the tax amount of the
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transaction. Tax documentation may be related to a single electronic payment transaction or
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multiple electronic payment transactions aggregated over a period of time. Tax documentation

LC005310 - Page 2 of 4
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includes, but is not limited to, invoices, receipts, journals, ledgers, and tax returns filed with the
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department of revenue or local taxing authorities.
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6-26.2-3. Interchange fees on taxes prohibited.

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(a) An issuer, a payment card network, an acquirer bank, or a processor shall not receive
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or charge a merchant any interchange fee on the tax amount of an electronic payment transaction
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if the merchant informs the acquirer bank or its designee of the tax amount as part of the
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authorization or settlement process for the electronic payment transaction. The merchant shall
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transmit the tax amount data as part of the authorization or settlement process to avoid being
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charged interchange fees on the tax amount of an electronic payment transaction.
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(b) A merchant that does not transmit the tax amount data in accordance with subsection
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(a) of this section may submit tax documentation for the electronic payment transaction to the
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acquirer bank or its designee no later than one hundred eighty (180) days after the date of the
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electronic payment transaction, and within thirty (30) days after the merchant submits the necessary
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tax documentation, the issuer shall credit to the merchant the amount of interchange fees charged
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on the tax amount of the electronic payment transaction.
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(c) This section does not create liability for a payment card network regarding the accuracy
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of the tax data reported by the merchant.
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(d) It shall be unlawful for an issuer, a payment card network, an acquirer bank, or a
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processor to alter or manipulate the computation and imposition of interchange fees by increasing
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the rate or amount of the fees applicable to or imposed upon the portion of a credit or debit card
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transaction not attributable to taxes or other fees charged to the retailer to circumvent the effect of
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this section.
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6-26.2-4. Penalties.

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An issuer, a payment card network, an acquirer bank, a processor, or other designated entity
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that has received the tax amount data and violates § 6-26.2-3 shall have engaged in a deceptive
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trade practice in violation of the provisions of chapter 13.1 of title 6 and shall be subject to a civil
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penalty of up to one thousand dollars ($1,000) per electronic payment transaction in violation of §
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6-26.2-3, and the issuer shall be responsible to refund the merchant the interchange fee calculated
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on the tax amount relative to the electronic payment transaction.
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SECTION 2. This act shall take effect upon passage.
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO COMMERCIAL LAW--GENERAL REGULATORY PROVISIONS --
INTERCHANGE FEE RESTRICTION ACT
***
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This act would create the interchange fee restriction act prohibiting interchange fees on
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sales and use tax or excise tax when payment is made with a credit or debit card.
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This act would take effect upon passage.
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