Push to end credit card fees on sales tax and tips

ALBANY, N.Y. (NEWS10)--- Restaurant and small business owners gathered in Albany calling for the passage of a bill that would save them money by getting rid of swipe fees on sales tax and tips.

When someone uses a credit card, that business then has to pay a processing fee to the credit card company or bank. 

"What most people don’t know, is that the fee also applies to the sales tax and the tips on that transaction," explained Senator James Skoufis. "Those things obviously, have nothing to do with the good or the service that business is providing that consumer."

Advocates say that small fee adds up quickly. 

"In New York, that’s $1 billion dollars a year that small businesses and the business community have to pay to big banks for the fee associated with the sales tax," said Skoufis.

He, along with Assemblyman John McDonald, sponsor a bill that would get rid of swipe fees on sales tax and tips.

Nancy Bambara of DZ restaurants, which owns and operates three restaurants in Saratoga Springs, said this bill could save her thousands of dollars. 

"These numbers are enormous," said Bambara. "Last year, my interchange fees were over $300,000. Of that, almost $72,000 was just driven by sales tax and tip income. That’s $72,000 that I could have put back into my staff. I could have given back to my servers. That’s really a big part of our bottom line."

According to lawmakers, the bill has faced opposition from credit card companies and banks. 

"They are very afraid of it, because it is going to cut a billion dollars into their profits," said Skoufis.

However, he is hoping to get the bill over the finish line before the end of session in June. 

"We’ve got about a month. I do think there is  a chance we can take this up and pass this bill. Illinois passed it a couple of years ago, so we’d be the second state in the country."