BILL REQ. #:  S-1427.1 

Read first time 02/05/2007.   Referred to Committee on Financial Institutions & Insurance.

     AN ACT Relating to creating a sales tax exemption for retail sellers for the state sales tax on interchange fees; and adding a new section to chapter 82.08 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   A new section is added to chapter 82.08 RCW to read as follows:
     (1) A seller may claim a credit against the tax imposed under RCW 82.08.020 on their tax return for the amount of interchange fees charged on retail sales by a financial institution in the same calendar year as the tax is imposed.
     (2) The credit in this section only applies to the state portion of the tax levied under RCW 82.08.020.
     (3) The seller must keep records necessary to enable the department to verify eligibility under this section.
     (4) For the purposes of this section, the following definitions apply:
     (a) "Interchange fee" means the fee a merchant's financial institution pays to a cardholder's financial institution when a cardholder uses a credit card or debit card as payment during a retail transaction.
     (b) "Financial institution" has the same meaning as provided in RCW 63.14.010(4).