Senate panels reject bill to ban card fees on sales tax collections

Credit and debit card companies will continue charging processing fees on the sales and use tax collected by merchants for the government, after Senate committees recommended against approving a bill that sought to prohibit such charges.

By THE STAR STAFF

Credit and debit card companies will continue charging processing fees on the sales and use tax (IVU by its acronym in Spanish) collected by merchants for the government, after Senate committees recommended against approving Senate Bill 675, which sought to prohibit such charges.

In a joint report, the Senate Committees on Federal Relations and Self-Determination, and on Economic Development, Small Business, Banking, Commerce, Insurance and Cooperativism, concluded that the measure should not advance in its current form.

“This recommendation does not dismiss the legitimacy of the problem identified nor question the commendable intent to provide relief to merchants and consumers who bear costs for collecting IVU on behalf of the government,” the report stated. “However, a comprehensive evaluation suggests exploring alternative approaches that address the issue more broadly, considering consumer and merchant protection goals alongside the technical, operational, and legal realities of the electronic payment ecosystem.”

The proposed legislation aimed to prevent payment processors, card networks, and financial institutions from applying processing fees on the IVU, as well as on tips and donations, arguing those funds are legally mandated to be collected and transferred to the state and do not constitute merchant income.