SB 2026

relating to the charging of swipe fees on certain electronic
payment transactions; authorizing a civil penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Title 12, Business & Commerce Code, is amended by
adding Chapter 610 to read as follows:
CHAPTER 610. CHARGING OF SWIPE FEES
Sec. 610.001.  DEFINITIONS.  In this chapter:
(1)  "Assessment fee" means a fee paid to the payment
card network for allowing a merchant to use a payment card or other
payment code or device in an electronic payment transaction.
(2)  "Electronic payment transaction" means a
transaction in which a person uses a payment card or other payment
code or device issued or approved through a payment card network to
debit a deposit account or use a line of credit, whether
authorization is based on a signature, personal identification
(3)  "Gratuity" means a voluntary monetary
contribution to an employee from a guest, patron, or customer in
connection with services rendered.
(4)  "Interchange fee" means a fee charged to a
merchant for the purpose of compensating the payment card issuer
for the issuer's involvement in an electronic payment transaction.
(5)  "Payment card" means a credit card, debit card,
check card, or other card that is issued to an authorized user to
purchase or obtain goods, services, money, or any other thing of
(6)  "Payment card issuer" means a lender, including a
financial institution, or a merchant that receives applications and
issues payment cards to individuals.
(7)  "Payment card network" means an entity that
directly, or through a licensed member, processor, or agent,
provides the proprietary services, infrastructure, and software
that route information and data to conduct debit card or credit card
transaction authorization, clearance, and settlement, and that an
entity uses in order to accept as a form of payment a brand of debit
card, credit card, or other device that may be used to carry out
(8)  "State or local tax" includes a tax imposed by this
state or a unit of local government of this state, including the
sales, excise, and use tax, motor fuels tax, hotel occupancy tax,
mixed beverage sales tax, and tax imposed on the rental of a motor
vehicle, other than a tax returned to a taxpayer in the form of a
deduction or discount under Section 151.423 or 151.424, Tax Code.
(9)  "Swipe fee" means the interchange fee and, if
applicable, the assessment fee.
Sec. 610.002.  EXCLUSION OF STATE OR LOCAL TAXES AND
GRATUITY FROM SWIPE FEES; MERCHANT DEDUCTION OR REBATE.  (a)  The
amount of state or local tax that is calculated as a percentage of
the amount of an electronic payment transaction made in this state
and gratuity that is listed separately on a payment invoice or other
demand for payment must be excluded from the total amount on which a
swipe fee is charged for that transaction.
(b)  A payment card network shall with respect to each form
or type of electronic payment transaction:
(1)  deduct the amount of state or local tax imposed and
gratuity from the calculation of swipe fees attributable to the
transaction at the time of settlement; or
(2)  rebate the merchant an amount equal to the amount
of swipe fees attributable to the state or local tax imposed and
(c)  A deduction or rebate under this section must occur at
the time of settlement when the merchant is able to capture and
transmit state or local tax or fee amounts and gratuity relevant to
the sale at the time of sale as part of the transaction
finalization.  If a merchant is unable to capture and transmit tax
or fee and gratuity amounts relevant to the sale at the time of
sale, then the payment card network must accept proof of tax or fee
amounts and gratuity collected on sales subject to a swipe fee on
the submission of sales data by the merchant and provide the rebate
no later than 180 days after the date of the electronic payment
transaction, and, within 30 days after the merchant submits the
(d)  This section does not create liability for a payment
card network regarding the accuracy of the tax or gratuity data
(e)  It shall be unlawful for a payment card issuer or a
payment card network to alter or manipulate the computation and
imposition of swipe fees by increasing the rate or amount of the
fees applicable to or imposed upon the portion of an electronic
payment transaction not attributable to taxes or gratuities to
circumvent the effect of this section.
Sec. 610.003.  CIVIL PENALTY; RESTITUTION.  (a)  A person who
violates this chapter is liable to this state for a civil penalty in
an amount not to exceed $1,000 for each violation.
(b)  The attorney general may bring an action to:
(1)  recover the civil penalty imposed under this
(2)  obtain a temporary or permanent injunction to
(c)  An action under this section may be brought in a
(2)  a county in which any part of the violation occurs.
(d)  The attorney general shall deposit a civil penalty
collected under this section in the state treasury to the credit of
(e)  A person who violates this chapter shall refund a
merchant any swipe fees charged in violation of this chapter.
SECTION 2.  If any of the provisions of this Act are held
invalid, the remainder shall not be affected as a result; nor shall
the application of the provision held invalid to persons or
circumstances other than those as to which it is held invalid be
SECTION 3.  This Act takes effect September 1, 2025.