Texas business organizations are rallying behind legislation designed to provide more equitable reimbursement for credit card transaction tax collection fees. House Bill 2428, sponsored by Vice Chair Terry Canales, proposes increasing the current reimbursement rate from 0.5-1.75 percent to 2.5 percent for credit card and digital transactions.
The proposed legislation addresses a long-standing issue facing Texas retailers who have effectively served as unpaid tax collectors. Credit card processing fees, typically ranging from 2 to 3 percent, are charged on the entire transaction—including sales tax—resulting in financial losses for businesses, particularly small and minority-owned enterprises operating on minimal profit margins.
TAMACC and supporting organizations argue that the current reimbursement system is outdated, created during an era when cash transactions were predominant. The bill seeks to modernize compensation mechanisms, aligning Texas with more than half of U.S. states that already offer similar reimbursement models.
Supporters emphasize that the proposed change is not a subsidy but a fair compensation for mandatory tax collection services. The legislation aims to reduce financial strain on businesses, encourage tax compliance, and strengthen the state's economic ecosystem by supporting small and mid-sized businesses.
The coalition backing HB 2428 includes diverse business associations such as the Texas Hotel & Lodging Association, Texas Food and Fuel Association, and the Neighborhood Beer Garden and Bar Association of Texas, demonstrating broad-based support for the proposed legislative reform.
