HF 4956

Introduction - 94th Legislature (2025 - 2026)

Posted on 04/16/2026 04:11 p.m.

A bill for an act
relating to commerce; prohibiting interchange fees on state and local taxes;
proposing coding for new law in Minnesota Statutes, chapter 53B.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [53B.76] INTERCHANGE FEES; PROHIBITION.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Acquirer bank" means a member of a payment card network that contracts with a
merchant, including directly or indirectly through a processor, to process and settle electronic
payment transactions.
new text end

new text begin (c) "Authorization" means the process through which a merchant requests approval for
an electronic payment transaction from the issuer.
new text end

new text begin (d) "Clearance" means the process to: (1) transmit final transaction data from a merchant
to an issuer for posting to the cardholder's account; and (2) calculate fees and charges,
including interchange fees, that apply to the issuer and the merchant.
new text end

new text begin (e) "Credit card" means a card or device issued under an arrangement pursuant to which
a financial institution provides to a cardholder the privilege of obtaining credit from the
financial institution or other person to purchase or lease property or services, obtain a loan,
or otherwise.
new text end

new text begin (f) "Debit card" means a card or other payment code or device issued or approved for
use through a payment card network to debit an asset account, regardless of the account's
purpose or whether the debit authorization is based on a signature, a personal identification
number, or other means. Debit card includes a general use prepaid card, as defined in United
States Code, title 15, section 16931-1. Debit card does not include paper checks.
new text end

new text begin (g) "Electronic payment transaction" means a transaction in which a person uses a debit
card, a credit card, or other payment code or device issued or approved through a payment
card network to debit a deposit account or use a line of credit, whether the debit or credit
line use authorization is based on a signature, a personal identification number, or other
means.
new text end

new text begin (h) "Gratuity" means a voluntary monetary contribution to an employee from a consumer
in connection with services rendered.
new text end

new text begin (i) "Interchange fee" means a fee established, charged, or received by a payment card
network to compensate the issuer for the issuer's involvement in an electronic payment
transaction.
new text end

new text begin (j) "Issuer" means a person issuing a debit card or credit card. Issuer includes the issuer's
agent.
new text end

new text begin (k) "Merchant" means a person who collects and remits a tax.
new text end

new text begin (l) "Payment card network" means an entity that:
new text end

new text begin (1) directly or through licensed members, processors, or agents provides the proprietary
services, infrastructure, and software to route information and data to conduct electronic
payment transaction authorization, clearance, and settlement; and
new text end

new text begin (2) a merchant uses to accept as a form of payment a brand of debit card, credit card, or
another device used to carry out electronic payment transactions.
new text end

new text begin (m) "Processor" means an entity that facilitates, services, processes, or manages the
debit or credit authorization, billing, transfer, payment procedures, or settlement with respect
to an electronic payment transaction.
new text end

new text begin (n) "Settlement" means the process of transmitting sales information to the issuing bank
to collect and reimburse funds to the merchant and calculate and report the net transaction
amount to the issuer and merchant for an electronic payment transaction that is cleared.
new text end

new text begin (o) "Tax" means any tax imposed by the state or local government at the point of sale.
new text end

new text begin (p) "Tax documentation" means documentation sufficient for the payment card network
to determine the total amount of the electronic payment transaction and the tax or gratuity
amount of the transaction, whether related to a single electronic payment transaction or
multiple electronic payment transactions aggregated over a period of time. Tax documentation
includes but is not limited to invoices, receipts, journals, ledgers, and tax returns filed with
the commissioner of revenue.
new text end

new text begin Subd. 2. new text end

new text begin Interchange fees on taxes and gratuity prohibited. new text end

new text begin (a) An issuer, a payment
card network, an acquirer bank, or a processor is prohibited from receiving or charging a
merchant an interchange fee on the tax amount or gratuity of an electronic payment
transaction if the merchant informs the acquirer bank or the acquirer bank's designee of the
tax or gratuity amount as part of the authorization or settlement process for the electronic
payment transaction. The merchant must transmit the tax or gratuity amount data as part of
the authorization or settlement process to avoid being charged interchange fees on the tax
or gratuity amount of an electronic payment transaction.
new text end

new text begin (b) A merchant that does not transmit the tax or gratuity amount data in accordance with
this section may submit tax documentation for the electronic payment transaction to the
acquirer bank or the acquirer bank's designee no later than 180 days after the date the
electronic payment transaction occurs. Within 30 days after the date the merchant submits
the necessary tax documentation, the issuer must credit to the merchant the amount of
interchange fees charged on the tax or gratuity amount of the electronic payment transaction.
new text end

new text begin (c) This section does not create liability for a payment card network regarding the
accuracy of the tax or gratuity data reported by the merchant.
new text end

new text begin (d) An issuer, a payment card network, an acquirer bank, or a processor is prohibited
from altering or manipulating the calculation and imposition of interchange fees by increasing
the rate or amount of the fees applicable to or imposed upon the portion of a credit or debit
card transaction that are not attributable to taxes or other fees charged to the retailer.
new text end