By William Lindstedt, Iman Jodeh, Julie McCluskie and Monica Duran

Small businesses across Colorado are working harder than ever right now to keep their doors open, hire local workers and serve their communities. But every day, they are forced to pay costly, hidden fees on money that was never theirs to begin with. It’s time to put a stop to these predatory fees, and we’re proud to sponsor a new bill that will do just that.

We’re talking about the swipe fees credit card companies charge on sales taxes, a greedy practice the biggest international banks use to earn profits off the backs of Colorado’s small businesses. Sales taxes fund the services our communities rely on, like public safety, road maintenance, fire protection, transit and the cultural institutions that make Colorado special; we should continue to support our state’s needs to fund those services, but not at the expense of local businesses.

When a local business collects sales tax, it is simply acting as a pass-through for the government. That tax revenue does not belong to the business for a single moment; they are legally required to send it to the government. They’re providing a service for all of us.

Yet every time a customer pays for a product or service with a credit card, swipe fees are charged on the entire transaction, including the sales taxes. Those fees, usually between 2% and 4%, are set by a handful of global card networks and the largest issuing banks, and they are non-negotiable. Small businesses cannot shop around for a better rate. They cannot opt out. They cannot refuse the dominant cards and stay in business. It is a take-it-or-leave-it system controlled by some of the world’s most profitable financial corporations.

Every time sales taxes go up to fund a new fire station, a transit line, or a cultural district, those companies get a raise. Big banks collect a percentage of public tax dollars for doing nothing more than processing a transaction. That is not a fair, free market; it is a private toll on money that belongs to Colorado communities.

For many small businesses, this means thousands, or even tens of thousands, of dollars in fees each year on tax revenue they never get to keep. At a time when costs are rising on everything from rent to utilities to insurance, that is money that could be used to hire and train workers, repair broken equipment, expand operating hours, or keep prices more affordable for customers. Instead, swipe-fee dollars — $217 million in 2024 alone — leaves Colorado money flowing to Wall Street and to the largest banks in the country.

This issue affects every corner of our state, from neighborhood restaurants and local retailers to hotels, service providers and family-owned shops on Main Streets in communities large and small. And this issue has become even more urgent as our budget challenges have forced the state to scale back tools that once helped local businesses manage the cost of tax compliance and remittance.

The solution is straightforward: Our legislation says swipe fees cannot be charged on sales taxes. We are not cutting taxes, raising taxes, or reducing the revenue that funds critical local services. We are ending the practice of multinational financial companies skimming a percentage off public tax dollars and forcing Colorado businesses and consumers to foot the bill. 

Colorado has always prided itself on being a place where entrepreneurs can succeed and local businesses can grow. Ending swipe fees on sales taxes is a practical, bipartisan step that keeps more money in our local economy, levels the playing field, and makes our tax system work as intended. It is a commonsense change, and one we’re proud to bring forward.

William Lindstedt is a member of the Colorado state Senate, representing Senate District 25. Iman Jodeh is a member of the Colorado state Senate, representing Senate District 29. Julie McCluskie is the Speaker of the Colorado House of Representatives, representing House District 13. Monica Duran is the Majority Leader for the Colorado of House Representatives, representing House District 23.