SALT Report 2139 – The South Dakota Department of Revenue issued guidance regarding the taxability of credit card fees. Generally, swipe fees, checkout fees, or any other surcharges that a retailer may charge for a credit card payment must be included in the retailer’s gross receipts and taxed as follows:
- If the sale includes products or services that are subject to sales tax, then the credit card fees are also taxable. The sales tax rate for these fees is the same as the rate that is charged on the product or service being sold.
- If the sale does not include items or services that are subject to sales tax, or the purchaser is exempt from sales tax, then sales tax does not apply to the credit card fees.
Also, contractors must report any swipe fees that they collect in the gross receipts that are subject to the contractors’ excise tax.
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