A bill to reduce the burden on small businesses that handle credit card transactions is pitting businesses against credit card companies, banks and the Metro Denver Chamber of Commerce.

House Bill 15-1154 is sponsored by Rep. Jon Becker, R-Fort Morgan, and Rep. Alec Garnett, D-Denver.

Current law requires businesses to send sales tax to the states. When those businesses accept credit cards, they are charged a percentage, usually 2 to 3 percent, as a fee by the credit card companies and banks. That fee is charged not only on the purchase but on the sales tax as well.

In 2014, the state collected $2.1 billion in sales tax revenues. Of that, about 60 percent came from credit, prepaid cards or debit cards. Assuming the low end of the credit card fee, at 2 percent, the credit card companies, banks and credit unions could have collected about $25 million in fees just on the sales tax.

HB 1154 would ban credit card companies and banks from assessing the credit card fees to the portion of the transaction that covers state and local taxes. If passed, the law applies to transactions made on and after July 1, 2017. Violations could result in penalties of $1,000 to $5,000 per transaction, and would be handled by the Attorney General. The bill’s fiscal note shows a slight increase in revenue due to expected fines, but the analysis also said they expected full or near-full compliance with the law.

Becker told The Colorado Statesman that current law forces businesses to pay a fee to collect sales tax, either on behalf of the state or on behalf of local or municipal taxing authorities. “The banks are arguing that it’s a programming issue” that will cost a lot of money to fix, he said.

The bill goes against some of Becker’s beliefs on mandates for business, but he said he also doesn’t believe it’s fair for a business to basically pay to collect sales tax. He also noted that the law also prohibits the credit card and bank companies from hiking their fees to cover the dollars lost from the sales tax fees.

HB 1154 is supported by Natural Grocers/Vitamin Cottage, 7-11 and a handful of other convenience store owners and has strong bi-partisan sponsorship, with 19 sponsors in the House and 11 in the Senate. Banks, credit card companies, credit unions and the Metro Denver Chamber of Commerce are opposed. The bill was originally scheduled for a hearing this week in the House Finance Committee but was postponed Wednesday.

— Marianne@coloradostatesman.com