AUGUSTA – Rep. Wayne Farrin, D-Jefferson, introduced legislation before the Taxation Committee on Wednesday that would help small businesses recoup the cost of some credit card and debit card fees.
“As a small business owner, I know firsthand how burdensome credit card fees can be,” said Farrin. “Consumers have largely moved from using cash to using credit cards, so out of convenience for customers, most businesses must accept credit cards to remain competitive but this comes with additional administrative costs. This refundable tax credit will help Maine's small businesses recoup some of these unavoidable costs, allowing them to invest more in growth, employees and their communities.”
Businesses with less than $2.4 million in annual gross sales – roughly $200,000 a month – would qualify for the tax credit. The credit would be worth the lesser of the actual transaction fees paid to card issuers or 2.5% of the sales taxes remitted by the businesses to the state.
For example, if a local retail store with $1 million in annual sales paid $25,000 in credit card processing fees and remitted $55,000 in sales tax to the state, they would qualify for a tax credit of $1,375 (calculated as 2.5% of $55,000), since this amount is less than their actual processing fees.
Hospitality Maine and the Retail Association of Maine testified in support of this bill.
The Legislature’s Taxation Committee will hold a work session on this bill in the coming weeks.
Farrin is serving his first term in the Maine House, and represents Jefferson, Alna, Whitefield and Wiscasset. He serves as a member of the State and Local Government Committee and the Marine Resources Committee.