A broad coalition of Texas business organizations, led by the Texas Association of Mexican American Chambers of Commerce (TAMACC), is urging state lawmakers to advance legislation that would provide more equitable reimbursement for retailers who collect sales taxes through credit card transactions.
House Bill 2428, authored by Vice Chair Terry Canales, seeks to update the current tax collection reimbursement rate from 0.5 to 1.75 percent to a more competitive 2.5 percent. The proposed legislation addresses a long-standing financial challenge where businesses absorb processing fees on credit card transactions, including sales tax amounts they never retain.
The current reimbursement structure disproportionately impacts small and minority-owned businesses operating with minimal profit margins. By proposing a more modern reimbursement model, the bill aims to provide financial relief without reducing the state's total tax revenue.
Supporting organizations, including the Texas Hotel & Lodging Association and Texas Food and Fuel Association, argue that the proposed change would align Texas with more than half of U.S. states that already offer similar reimbursement approaches. This legislative effort could enhance business competitiveness and encourage more consistent tax collection compliance.
TAMACC Vice Chairman JR Gonzales emphasized that businesses are seeking fairness, not a handout. The proposed legislation represents a critical update to a tax collection framework created during an era when cash transactions were predominant.
