A short conversational YouTube video (hosted by Donna Genie) about the financial and regulatory pitfalls of adding credit card processing surcharges. The speakers warn that while businesses may try to recoup ~3% processing fees, some states treat those surcharges as part of the taxable sale (notably California, New York, and Texas), meaning sales tax should be calculated on the total including the fee (e.g., $100 + $3 fee → tax on $103). The video emphasizes state-by-state differences and the potential for unexpected tax liabilities.
We're all kind of.
Tired of seeing businesses tack on credit card processing fees to their bill as a surprise when you pay.
That consumer.
Surprise may.
Be preparing to turn around and fight business owners.
If they aren't careful. Business owners.
Might be thinking they are recouping 3% processing fees, but instead they get a visit from their state Department of Revenue and find they owe thousands of dollars in sales tax that they weren't expecting. Are those pesky fees subject.
To sales tax?
Well, every state handles credit card processing fees differently.
When it comes to sales tax.
Some states, absolutely. These fees is a part of the taxable transaction. California, New York and Texas are particularly strict about this. You can't just assume that one rule fits all. Each state has its own specific guidance. When you charge a processing fee, that amount gets added to the total transaction value for sales tax purposes. For example, if your product costs $100 and you charge a $3 processing fee, you're now calculating sales tax on $103. This might seem small, but over hundreds or thousands of transactions, it adds up quickly.
