WASHINGTON—NAFCU and CUNA have joined with several financial trade organizations on a letter to members of the Wisconsin Assembly Committee on Financial Institutions that warns of the “troubling” side effects of Wisconsin legislation that would prohibit interchange on the sales tax provision of electronic payment transactions.
The organizations stated the prime victims of the proposal would be consumers and small businesses and a "vibrant small business sector is essential to the economic recovery of the United States."
In addition, the group broke down what they called the “unworkable nature” of the proposal.
"When a retailer makes a sale using a customer's electronic payment card, the system that processes the transaction recognizes only the final purchase amount on which the merchant discount fee is based," wrote the group. "The system transmits neither information regarding the product, nor services sold, nor the amount of sales tax collected.
Becoming an ‘Island’
"The result of the implementation of this legislation would make Wisconsin an island in a nationwide payment system," the letter reads.
The organizations added that retailers would be required to create and implement new payments systems and operational mechanisms to ensure compliance, "which would be both costly and burdensome."