CA AB1065

Prohibits credit card issuers, payment card networks, acquirer banks, and processors from charging interchange fees on the tax portion of electronic payment transactions when merchants transmit tax amount data during authorization or settlement

Covers state sales and use taxes, local sales taxes, transactions and use taxes, cigarette/tobacco taxes, alcoholic beverage taxes, and cannabis taxes

Requires merchants who fail to transmit tax data at the time of transaction to submit tax documentation within 180 days, with issuers then required to credit the interchange fees charged on taxes within 30 days

Bars payment card networks, acquirer banks, and processors from increasing interchange fee rates on the non-tax portion of transactions to circumvent the law's requirements

Violations involving a knowing pattern or practice of assessing fees on tax portions are enforceable under California's Unfair Competition Law, with courts considering factors like control over tax data and reasonable compliance efforts