Interchange fees on state and local taxes prohibited.

This bill prohibits banks and payment networks from charging interchange fees on state and local sales taxes or gratuities added to credit and debit card transactions. To qualify for this protection, merchants must clearly separate tax and tip amounts from the purchase price when processing payments or provide proof of these amounts within 180 days if they were initially included in the total. If a merchant submits the required documentation after the fact, the law mandates that any interchange fees wrongly charged on the tax or tip portion be refunded within 30 days. The legislation also prevents payment processors from manipulating fee calculations to increase charges on these specific transaction components.