A coalition of New York’s leading business trade associations, spearheaded by the National Federation of Independent Business (NFIB), has expressed support for a new legislative proposal aimed at altering credit card swipe fee structures. The bill, identified as A.4017 (McDonald)/S.5587 (Skoufis), seeks to exclude sales tax and gratuities from these fees, potentially saving consumers, employees, and merchants $930 million annually.
The push for this legislation comes in response to increasing concerns over the impact of swipe fees on small businesses. According to Capital One Shopping Research, cash is used in only 12 percent of in-store transactions, with Americans spending nearly $11 trillion using cards in 2023. In that year alone, swipe fees totaled $172 billion nationwide.
Assemblymember John T. McDonald III highlighted the importance of supporting tipped workers and small businesses through this measure. “Small businesses should not have to pay a fee for collecting required taxes,” he stated.
Senator James Skoufis criticized credit card companies for their practices, describing them as predatory. He noted that these fees amount to nearly $1 billion annually taken from state businesses and emphasized the need for financial relief for struggling Main Street shops.
Ashley Ranslow, NFIB New York State Director, voiced strong support for controlling these fees which she described as damaging to startups and job creation. “This unfair and costly practice must end,” she said.
Mike Durant, President of the Food Industry Alliance of New York, also backed the legislation, noting it would save retailers more than $900 million per year by removing sales tax from interchange fees.
Melissa Fleischut, President & CEO of the New York State Restaurant Association, underscored the challenges faced by restaurants due to high labor costs and inflation. She argued that current fee structures are forcing restaurants to raise costs unnecessarily.
The NFIB-led coalition comprises several organizations including the Food Industry Alliance of New York and the New York State Restaurant Association among others.
