Honorable Stan Lambert, Chair, House Committee on Pensions, Investments & Financial Services
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB4124 by Darby (Relating to the charging of swipe fees on certain electronic payment transactions; authorizing a civil penalty.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB4124, As Introduced: an impact of $0 through the biennium ending August 31, 2027.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five- Year Impact:
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2026
$0
2027
$0
2028
$0
2029
$0
2030
$0
All Funds, Five-Year Impact:
Fiscal Year
Probable (Cost) from Statewide Network Apps Acct - AR 8143
2026
($2,725,000)
2027
$0
2028
$0
2029
$0
2030
$0
Fiscal Analysis
The bill would require a merchant who accepts electronic payments (e.g., credit cards) from customers to deduct the amount of a gratuity and state or local tax imposed from the calculation of swipe fees associated with the transaction at the time of settlement and payable to the payment card network.
The bill would take effect September 1, 2025.
Methodology
This analysis assumes the bill's provisions would have no impact on state or local tax collections because the bill would involve gains or losses of amounts between merchants and payment card networks.
The Department of Information Resources indicates that the bill would require changes to Texas.gov payment processing applications. The bill would require all agencies that charge local taxes to modify their applications to identify for the payment processor the amount of local taxes that should not have a credit card processing fee. DIR and the Texas.gov application vendor worked to identify the costs impacting DIR on the assumption there are approximately two to five agencies charging taxes on their transactions through Texas.gov. This analysis assumes a one time cost for professional services in fiscal year 2026. The cost would be paid out of the Statewide Network Applications Account, which receives various fees from transactions through the Texas.gov state Internet portal. Any increases out of the account would result in a decrease in transfer of revenues to the General Revenue fund.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies:
212 Office of Court Administration, Texas Judicial Council, 302 Office of the Attorney General, 304 Comptroller of Public Accounts, 313 Department of Information Resources, 466 Office of Consumer Credit Commissioner, 802 Parks and Wildlife Department