MD HB29

Merchants may request that interchange fees (credit/debit card processing fees) be calculated excluding sales tax and gratuity amounts from electronic payment transactions by submitting documentation during authorization or settlement

Issuers, payment card networks, acquirer banks, and processors must exclude tax and gratuity from interchange fee calculations when merchants provide proper documentation; merchants have 180 days to submit documentation retroactively for a refund within 30 days

Violations carry a $1,000 civil penalty per transaction for failing to exclude tax/gratuity amounts or failing to credit merchants the overcharged interchange fees

Payment processors are prohibited from retaliating by increasing interchange fee rates on the non-tax/gratuity portion of transactions for merchants who request the exclusion

Electronic payment transaction data may only be used for processing transactions, fraud prevention, loyalty programs, tailoring products to customers, or as required by law; unauthorized use constitutes an unfair trade practice under Maryland's Consumer Protection Act