Full Text of SB2083 102nd General Assembly
SB2083 102ND GENERAL ASSEMBLY
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
Introduced 2/26/2021, by Sen. Cristina Castro
SYNOPSIS AS INTRODUCED:
Creates the Interchange Fee Act. Provides that the amount of any
covered tax that is calculated as a percentage of the gross retail income
received by a merchant or seller in an electronic payment transaction and
listed separately on the payment invoice or other demand for payment must
be excluded from the amount upon which any interchange fee is charged for
the electronic payment transaction with respect to which the covered tax
is imposed. Contains provisions concerning penalties.
|FISCAL NOTE ACT MAY APPLY|
A BILL FOR
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AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
This Act may be cited as the
Interchange Fee Act.
As used in this Act:
"Covered tax" means any separately stated State or local
tax on goods or services.
"Credit card" means any card, plate, coupon book, or other
credit device that is issued for the purpose of allowing a
person to obtain money, property, labor, or services on
"Debit card" means any 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 purpose
for which the account is established or whether authorization
for the debit is based on a signature, a personal
identification number, or other means. The term "debit card"
includes a general-use prepaid card but does not include a
"Electronic payment transaction" means a transaction in
which a person uses a debit card, a credit card, or another
payment code or device issued or approved for use through a
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payment card network to debit a deposit account or use a line
of credit, regardless of whether authorization for the debit
is based on a signature, a personal identification number, or
"Interchange fee" means a fee established, charged, or
received by a payment card network for the purpose of
compensating an issuer for the issuer's involvement in an
electronic payment transaction.
"Issuer" means a person, or agent thereof, that issues a
debit card or a credit card.
"Payment card network" means an entity that, directly or
through licensed members, processors, or agents, provides the
proprietary services, infrastructure, and software that:
(1) routes information and data to conduct debit card
or credit card transaction authorization, clearance, and
(2) a merchant or seller uses in order to accept as a
form of payment a brand of:
(A) debit card;
(B) credit card; or
(C) another device that may be used to carry out
debit or credit transactions.
"Settlement", with respect to an electronic payment
transaction, means the transfer of funds from a customer's
account to a seller or merchant upon electronic submission of
finalized sales transactions to a payment card network.
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Payment card interchange fees.
(a) The amount of any covered tax that is calculated as a
percentage of the gross retail income received by a merchant
or seller in an electronic payment transaction and listed
separately on the payment invoice or other demand for payment
must be excluded from the amount upon which any interchange
fee is charged for the electronic payment transaction with
respect to which the covered tax is imposed.
(b) A payment card network shall do one of the following:
(1) at the time of settlement of an electronic payment
transaction, deduct from the calculation of any
interchange fees to be imposed the amount of any covered
taxes that are specific to that form or type of electronic
payment transaction; or
(2) rebate an amount of the interchange fee in an
amount proportionate to the amount of the interchange fee
attributable to all covered taxes imposed in the
electronic payment transaction.
(c) Except as provided in subsection (d), a deduction or
rebate made under subsection (b) must occur at the time of
settlement when the merchant or seller, as part of the
transaction finalization, is able to capture and transmit tax
and fee amounts relevant to the sale at the time of sale.
(d) If a merchant or seller is not able to capture and
transmit tax or fee amounts relevant to the sale at the time of
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sale, the payment card network shall:
(1) upon submission of sales data by the merchant or
seller, accept proof of covered tax amounts collected on
sales subject to an interchange fee; and
(2) promptly credit the merchant's or seller's
(e) It shall be unlawful to alter or manipulate the
computation and imposition of interchange fees by increasing
the rate or amount of the fee applicable to or imposed upon
that portion of an electronic payment transaction not
attributable to a State or local tax or fee to circumvent the
effect of this Act.
A payment card network that
violates this Section: (1) is liable for a civil penalty in an
amount not to exceed $1,000 per violation, payable to a person
determined by a court to have been aggrieved by the violation;
and (2) shall refund to each merchant or seller affected by the
violation the amount of excess interchange fees collected.